Many Greek bondholders signaling a "no deal" scenario, page

link to article

Because, finally, as the FT reports, the deal is nowhere in sight: "Several hedge fund managers that hold Greek debt have said they have not been involved in the talks and will not be agreeing with the “private sector involvement” (PSI) deal – which centres on a 50 per cent loss on bondholders’ capital and a reduction in the interest they receive...

Even members of the committee concede the process is unlikely to succeed in time for the crunch date: a €14.5bn bond repayment falling due on March 20."

So, basically, it looks like hedge funds are holding Europe hostage because they want their payouts. It seems that it has something to do with the fact that they don't have to accept a 50% write-down because a refusal will mean a Greek default, guaranteeing that they get their CDS payouts.

From the article, it also seems that the hedge funds have been busy little beavers buying up Greek bonds left and right, consolidating Greece's creditors list and increasing their ownership in the Greek bond game.

reply to post by openeyeswideshut

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just another dirty money scam that involves the people who own the world creating a situation of debt then buying everything bit of it dirt cheap.

Just how did the bond holders create the debt? The people of Greece borrowed and spent the money.
The hedge funds entered a contract to loan x amount of money for a return of a specific percent interest.
Greece wants to negate the contract and convert the deal to half the face value over a longer period of time.

Suppose you loaned your brother in law $10K to be paid back in 6 months. Three months later he want to change the deal to pay you $5K in 5 years. Is that fair to you???

The hedge funds have insurance (CDS) for this.
They can get more than 50% right now from the CDS or 50% much later (if ever) from Greece.
Which would you take??

Originally posted by samkent
reply to post by openeyeswideshut

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just another dirty money scam that involves the people who own the world creating a situation of debt then buying everything bit of it dirt cheap.

Just how did the bond holders create the debt? The people of Greece borrowed and spent the money.
The hedge funds entered a contract to loan x amount of money for a return of a specific percent interest.
Greece wants to negate the contract and convert the deal to half the face value over a longer period of time.

Suppose you loaned your brother in law $10K to be paid back in 6 months. Three months later he want to change the deal to pay you $5K in 5 years. Is that fair to you???

Suppose you knew that your brother-in-law was already on the verge of bankruptcy, and that everyone else knew it too. Suppose that you knew you could lend him that money and be assured of getting it back because he would have to get it from somewhere, even if it meant robbing his grandmother to pay you.

Yeah, who's the moral one in this arrangement?

We all knew what the situation was with Greece a long time ago, and the people buying those bonds and propping up what we all knew was a failed state did it because they viewed their loans as being guaranteed through the robbing of the people, the loans from other nations and their people, and through the wholesale auction of state assets.

The bond holders did this through greed, taking advantage of a situation for their own profit. And now that profit is looking unlikely they're crying about it.

Screw them! If we knew what they were getting into so did they. They took the risk, they failed. They gambled and they lost.

I hope Greece defaults, and that those bond holders suffer massive losses. They deserve it for playing that game and trying to profit from the unstable system. It should have all crashed a long time ago, and if it had we would probably all be in a better position by now.
But we keep digging the hole deeper and deeper as these greedy and sick creatures want to grab everything they can, refusing to accept that their days of billions of profit in fictional currency from the click of a button are over.

reply to post by samkent

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The people of Greece didn't borrow - their government did.

Greece is essentially controlled by two extended families, and they are the ones that went on spending sprees - real estate, military hardware, etc. Greek personal debt is actually pretty low.

The hedge-fundies always want it both ways - they take huge fees from clients and justify massive profits because they are 'risk takers' but seem to think that they should only have to take winning bets.

Greece is a sovereign nation and as such the bonds are only as good as the country is willing to pay.

The country isn't even that much of a threat to the financial system - they are way too small. The fear if they default and the world doesn't end is that other, larger countries will get the same idea.

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