Greek default

‘s Dallara Seems To Think So

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Greece has fallen out of the headlines in the past few days due to a supposed resolution of the debt deal, but large hurdles still exist.  Managing Director Dallara of the IFF is under the impression that the current plan will be proved a success next week with investors exchanging their current bonds for a 53.5% haircut.  However the success of this exchange requires a 90% participation rate which is a tall order for many of the hedge funds holding Greek debt.  If participation can be raised above 75% but under 90% then Greece will bring the issue to their … Read more

S&P Sees Greek Default on Debt After EU Plan Takes Effect

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July 27 (Bloomberg) — Greece will partially default on its debt once European officials push through a plan that will see bondholders foot part of the bill of a second bailout agreed to last week in Brussels, Standard & Poor’s said. The rating company also cut its ranking for Greece to CC, two steps above default, from CCC, according to a statement published in London today. The outlook on the debt is negative. “The proposed restructuring of Greek government debt would amount to a selective default under our rating methodology,” S&P said. “We view the proposed restructuring as a ‘distressed … Read more

Soros Says “We are on the verge of an economic collapse…

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Soros Says a Euro Exit Mechanism Is ‘Probably Inevitable’ Amid Debt Crisis By Zoe Schneeweiss June 27 (Bloomberg) — Billionaire investor George Soros said it’s “probably inevitable” that a mechanism will be put in place to allow weaker economies to exit the euro.     There’s no arrangement for any countries leaving the euro, which in current circumstances is probably inevitable,”Soros, 80, said at a panel discussion in Vienna yesterday on whether liberal democracy is at risk in Europe. “We are on the verge of an economic collapse which starts, let’s say, in Greece, but it could easily spread. The financial system … Read more

Weekend Reading -more gloom and doom

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Financial Times Flight from money market funds exposed to EU banks By Michael Mackenzie and Nicole Bullock in New York Investors are withdrawing cash from money market funds heavily exposed to short-term debt issued by European banks out of fear that a Greek default could spark contagion across the region’s financial sector. At the same time there is increasing reluctance among US banks to lend to their European counterparts in the past two weeks because of growing worries over Greece, according to brokers and bank traders. This could lead to short term liquidity crisis for European banks perceived to be … Read more