Reply to: Greece WILL default on its debts ....

[Doggy Styles]

So if I send an IOU to my bank, I am not in default?

No. My bank has an IOU from me.

[Paddy]

That is a debt spiral, but it isn't a default. They seem to have avoided default by getting their creditor agreement.

But we'll see in a few months when they've got to go through all this again.

So if I send an IOU to my bank, I am not in default?

[Doggy Styles]

Greece is in default. It is the same as someone borrowing from the bank, paying the interest by borrowing from a credit card, paying the credit card via a loan shark but not paying back the loan shark and instead giving him a post-it note with an IOU on it

That is a debt spiral, but it isn't a default. They seem to have avoided default by getting their creditor agreement.

But we'll see in a few months when they've got to go through all this again.

[Freamon]

Debt crisis and Greek bond swap: live - Telegraph

20.55 After a marathon seven-hour meeting, the International Swaps & Derivatives Association (ISDA) tonight dramatically declared a "credit event had occurred" and billions of euros of credit default insurance will have to be paid out. The credit default swap (CDS) market is opaque but analysts estimate the ruling will cost European banks around €3.5bn. Even so, bankers were relieved by the decision – the opposite call could have undermined investor confidence in the entire CDS market.

Mother of all netting sessions next week, then.

[Paddy]

Greece is in default. It is the same as someone borrowing from the bank, paying the interest by borrowing from a credit card, paying the credit card via a loan shark but not paying back the loan shark and instead giving him a post-it note with an IOU on it

[BrilloPad]

Debt crisis and Greek bond swap: live - Telegraph

20.55 After a marathon seven-hour meeting, the International Swaps & Derivatives Association (ISDA) tonight dramatically declared a "credit event had occurred" and billions of euros of credit default insurance will have to be paid out. The credit default swap (CDS) market is opaque but analysts estimate the ruling will cost European banks around €3.5bn. Even so, bankers were relieved by the decision – the opposite call could have undermined investor confidence in the entire CDS market.

[eek]

What the EU is trying to do is kick the tin can down the road, hoping for a smaller tin can after each bail out until there is no problem to deal with. Unfortunately that depends on Greece recovering. It won't recover whilst it is still in the EU - the sums just don't work.

Its a shame its a snowball that they are kicking and the ground is covered in snow.

[sasguru]

BBC News - Eurozone ministers back 130bn-euro bailout for Greece



Isn't that a default in all but name?

It certainly is, just packaged to look good.

Unfortunately that depends on Greece recovering. It won't recover whilst it is still in the EU
- the sums just don't work.

And there's the crux of the matter. Austerity is killing the patient. Those continentals have never understood economics.

[Lockhouse]

What the EU is trying to do is kick the tin can down the road, hoping for a smaller tin can after each bail out until there is no problem to deal with. Unfortunately that depends on Greece recovering. It won't recover whilst it is still in the EU - the sums just don't work.

[ThomasSoerensen]

BBC News - Eurozone ministers back 130bn-euro bailout for Greece



Isn't that a default in all but name? I don't think this is the last of it, the Greeks have got the money for now but am sure another crisis for them will be just around the corner. And now, with the money in hand, can't they just turn around anyway and tell Europe to "do one"? They have £110Bn in loans but if they can't pay it back then what will Europe be able to do if Greece decide now (or in 12 months time) to walk away?

No no, out trustworthy politicians have told us the writedown is entirely voluntary - then it is not a default.
plonkers - the politicians, that is.

[administrator]

BBC News - Eurozone ministers back 130bn-euro bailout for Greece

The deal also means that private holders of Greek debt will take losses of 53.5% on the value of their bonds.


When all the elements of the exchange are accounted for, the loss to investors is expected to be as much as 70%.

Isn't that a default in all but name? I don't think this is the last of it, the Greeks have got the money for now but am sure another crisis for them will be just around the corner. And now, with the money in hand, can't they just turn around anyway and tell Europe to "do one"? They have £110Bn in loans but if they can't pay it back then what will Europe be able to do if Greece decide now (or in 12 months time) to walk away?

[sasguru]

Of course it has, Sterling has been deflating since long before QE begun.

Blackpool and Morecambe bay from now on.

Not very numerate are you.
Euro has been declining steadily for the last year, I find Euro destinations very affordable nowadays

Pound Sterling to Euro Exchange Rate Graph - Feb 22, 2011 to Feb 17, 2012


PS you still buying petrol at Euro 1.25? Idiot.

[Arturo Bassick]

Which elections? Sarkozy is going to lose and Merkel doesn't seem to be in a much better position.

While the Greeks have not defaulted and the whole house of cards is still standing there a chance, albeit slim, that some of them may get re-elected, especially if they can point out that the opposition would have done worse. There is also a slim chance that pointers will be on the up by the time the elections come round.
I am imagining all of them offering the UK patent EU referendum if re-elected as a last resort.

[BrilloPad]

When will Greece default? That's the only question worth asking.

About 3 months after the Greeks hold their election?

[scooterscot]

Spot on there, a lot of people I know used to enjoy going on holiday in Europe but since the introduction of the euro it has gotten increasingly more costly to holiday there.

Of course it has, Sterling has been deflating since long before QE begun.

Blackpool and Morecambe bay from now on.