Greek agreement not happened yet?

[BlasterBates]

What of the total debt only 3-4.5%

The interest rate to be paid on the bond once they've been swapped.

Basically investors swap a bond with one that has a face value of about 50% of the original bond, I think and now they have to agree what interest rate they pay on it.

[The Spartan]

Thing is though isn't this just all prolonging the inevitable, so Greece will get bailed out over and over again or to the point where they default and leave the Euro

[d000hg]

The Greeks want 3% and the investors want 4.5%. It'll probably end up somewhere in between.

Good deductive reasoning.

[centurian]

The problem is a lot of the private creditors have insured the debt against credit events such a default, and they will receive 100% of the debt if Greece default from, the insurer, and many probably have create hedge positions to actually profit from a default. Not much incentive to take a haircut is there?

The only thing that is holding them back from demanding near 100% - is that no-one really knows who holds the CDS's - because they have been packaged, repackaged and resold etc.

And most holders of Greek bonds own a host of other assets and funds - hence they are slightly reluctant to light the default fuse wire - cause they can't be certain that the wire doesn't go to a stick of dynamite sitting next to them.

[AtW]

The only thing that is holding them back from demanding near 100% - is that no-one really knows who holds the CDS's - because they have been packaged, repackaged and resold etc.

No, the only reason stops them is Germany and France who made it clear that if they don't agree to big haircut they won't be getting anything from Greece and chances are banks who had CDS would go bust this time.

[darmstadt]

The Greeks are going to be even more screwed soon if the oil embargo of Iran goes ahead. Most EU countries want it to start pretty ASAP apart from the Greeks as they import most of their oil from there. If the embargo does go ahead then naturally their fuel and energy prices will rocket...oh dear...

[AtW]

If the embargo does go ahead then naturally their fuel and energy prices will rocket...oh dear...

Errr, why? Petrol prices in Corfu last summer were as big as UK, hardly they were getting cheap fuel in the first place, especially given how much tax is in the thing with price of oil going up by 30% will only increase retail prices by a lot less: UK retail prices doubled when oil gone up 10 times since 1998.

[darmstadt]

If there is a lack of something then prices go up, don't they?

But several EU countries have struck deals with Iran. Greece gets about a third of its oil from Iran, Italy 13% and Spain 10%. These countries plans to deal with their debt could be thrown into disarray if they now have to tear up their preferential price contracts with Iran and cast about for another supplier. Turkey is another of the four main importers of Iranian oil.

[AtW]

If there is a lack of something then prices go up, don't they?

Iran will have to sell it with a big discount to China, which will in turn buy less from world market and that will be picked by Greece, not much changed but Iran will get a lot less dosh for their stuff.

[Freamon]

The Greeks are going to be even more screwed soon if the oil embargo of Iran goes ahead. Most EU countries want it to start pretty ASAP apart from the Greeks as they import most of their oil from there. If the embargo does go ahead then naturally their fuel and energy prices will rocket...oh dear...

Surely oil supplies are substitutable to such an extent that (ignoring the relatively negligible transportation costs) it doesn't matter who imports their oil from wherever, a fall in the total supply would affect the market price paid by everyone equally?