Nearly 95% of Greek Creditors Agree to Bond-Swap Deal

Discussion in 'Economics' started by Cdntrader, Mar 8, 2012.

  1. Nearly 95% of Greek Creditors Agree to Bond-Swap Deal

    Person involved in Greek debt deal tells FT the participation rate is 90-95%, and possibly even over 95%
  2. Epic


    Does it really matter? They were all told that if they didn't do it voluntarily, then they were going to be forced into it.

    Precisely why I don't invest in government bonds. They get to change the rules as they go along.
  3. hehe a lot of folks got burned on Tuesday :)

    I wonder how long before the masses wake up, for now these panic selloffs will just keep providing good opportunities.
  4. um ya it matters. less than 90% is CDS Default.
  5. Epic


    Seems like you are missing a key point. The bond holders were not given a choice. You are acting like they had the option of not agreeing to the swap. They were told several times over the last week that agreeing to the swap was the only option on the table. Either agree to it voluntarily or the CACs kick in and you are forced to agree to it.

    Sure, use of CACs would trigger a CDS default, but what other option did the bond holders have? So IMO, it was a foregone conclusion that almost all would participate "voluntarily". Obviously they were going to hold out as long as possible so that they can show their disapproval and look better to investors.
  6. Bernanke saw a 200 point sell off on his Bloomberg terminal, panicked, then quickly called Jon Hilsenrath at WSJ to announce sterilzed bond purchases.
  7. pupu


    If it looks like a duck, walks like a duck and quacks like a duck....

    Still a default
  8. The key point is CDS negative market reaction.
  9. That's not the key point, but then again you are as dense as a cinder block.

    "Move along, nothing to see here"
  10. Epic


    The key point is that there was never going to be a CDS default. The bond holders were not given any other choice but to participate. If they chose to fight it, they would've been forced to to participate via CAC and they situation for them would've been even worse. They still would've had to accept a bond swap, but the CAC would've triggered a CDS default and the new bonds would pretty much be worthless.

    So the options were, 1) volunteer to participate and hope that the new bonds increase in value in the future or 2) be forced to volunteer and pretty much guarantee that the new bonds will be worthless.

    Again, there was never going to be a default.
    #10     Mar 9, 2012