Buying Greek Bonds
Discussion
seaninog said:
Bloody good question. I'd like to hear the answer to this too. I heard 2yr bonds were yielding almost 40%!
Whoever told you that is talking out of their rear end. 2 yr bonds are currently yielding about 10%, have been as high as 18% I think . Don't sound cheap enough to justify the risk to me......if they were to go back to say a 4% yield you'd make a 10% return. There is a very real chance that Greece has to restructure it's debt at some time in the next two or three years.....the proposed bail out doesn't make the problem go away. The nice thing about the EU is that Portugal are on the hook for about 5% of the bailout which they can't afford....not being in the single currency is looking like a very, very good thing right now. A mate of mine emigrated to NZ last year precisely because of this. Wanted to be as far away from the Eurozone as possible!
Beardy10 said:
seaninog said:
Bloody good question. I'd like to hear the answer to this too. I heard 2yr bonds were yielding almost 40%!
Whoever told you that is talking out of their rear end. 2 yr bonds are currently yielding about 10%, have been as high as 18% I think . Don't sound cheap enough to justify the risk to me......if they were to go back to say a 4% yield you'd make a 10% return. There is a very real chance that Greece has to restructure it's debt at some time in the next two or three years.....the proposed bail out doesn't make the problem go away. The nice thing about the EU is that Portugal are on the hook for about 5% of the bailout which they can't afford....not being in the single currency is looking like a very, very good thing right now. A mate of mine emigrated to NZ last year precisely because of this. Wanted to be as far away from the Eurozone as possible!
seaninog said:
But, but.... it was in the DAILY MAIL...they wouldn't lie and stir up negative sentiment against foreigners, surely...
God forbid! Been doing some more reading on this. This bailout is a stay of execution....there will almost definitely be a debt restructuring in two or three years which means investors will lose 30 to 40% of whatever they have invested. It's an absolute s
t show, it's all about prolonging the pain to let all the banks etc that have exposure to Greece deal with it over the next two or three years as no one can afford to take it now. Greece itself is screwed.....I hadn't realised how corrupt it is but apparently it's shocking. Funnyily enough I was chatting to someone the other day whose wife was treated by a Greek doctor, payment to a Swiss bank account in U$ please!NoelWatson said:
Beardy10 said:
there will almost definitely be a debt restructuring in two or three years
Who told you that?Beardy10 said:
NoelWatson said:
Beardy10 said:
there will almost definitely be a debt restructuring in two or three years
Who told you that?NoelWatson said:
I don't need to work it out for myself. I go on Bloomberg and look at what the market is pricing (CDSW - MM restructuring). Maybe you know more than they do.
The market is always right isn't it ? Always. And if you really believe in what a credit derivative pricing model tells you I suggest you go back to basics and do some fundamental analysis, assuming you can ? Perhaps you can tell me how the Greek govt will balance it's budget, and keep servicing it's debt without restructuring ? You obviously believe it will. After all that is what the market is telling you. Beardy10 said:
NoelWatson said:
I don't need to work it out for myself. I go on Bloomberg and look at what the market is pricing (CDSW - MM restructuring). Maybe you know more than they do.
The market is always right isn't it ? Always. And if you really believe in what a credit derivative pricing model tells you I suggest you go back to basics and do some fundamental analysis, assuming you can ? Perhaps you can tell me how the Greek govt will balance it's budget, and keep servicing it's debt without restructuring ? You obviously believe it will. After all that is what the market is telling you. Beardy10 said:
NoelWatson said:
Beardy10 said:
NoelWatson said:
Isn't it amazing how many people know better than the market
Well why don't you bookmark this thread and check back in three years. No patience ? Too bad.
There's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
There's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
Beardy10 said:
No patience ? Too bad.
There's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
I never really understands posts like this. The market is always right. Even when it is wrong it is right. It is the collection of all individuals thoughts to the correct price. Surely if you think they are wrong and not taking into account "German political risk , French political risk , ECB collateral rules etc etc etc" then YOU should put on the position against the market and YOU could retire. Not tomorrow but definitely within 3 yearsThere's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
R11ysf said:
The market is always right.
...
Not tomorrow but definitely within 3 years
I would disagree - it's nearly always wrong!...
Not tomorrow but definitely within 3 years
Just playing with some figures -
if it does default in 2 years time you will receive (40% x 2) less 100% face value i.e. lose 20%, if 3 years then you make 20%, whereas you could just keep your 100% in the bank and get 105% back in 2 years. Well do you feel lucky? Do you?
R11ysf said:
Beardy10 said:
No patience ? Too bad.
There's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
I never really understands posts like this. The market is always right. Even when it is wrong it is right. It is the collection of all individuals thoughts to the correct price. Surely if you think they are wrong and not taking into account "German political risk , French political risk , ECB collateral rules etc etc etc" then YOU should put on the position against the market and YOU could retire. Not tomorrow but definitely within 3 yearsThere's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
Besides, many who probably want to sell can't.The logical thing to do with Greece is to kick it out, let it fail and use what money the EU has to draw a sensible line in the sand and defend that to the death. The trouble is that no one has the balls to do this. The other big problem is that the sensible line to draw would exclude most southern states. There is something in the Med water that seems to make everyone lazy, corrupt and very demanding of money from Northerners.
Greece is totally corrupt and inept. Any bailout funds will be in Switzerland up quicker than a charitable donation to Africa.Beardy10 said:
No patience ? Too bad.
There's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
Nostradamus, thanks for the lecture. Let me know when you are ready to put your money where your mouth isThere's almost zero chance by November...if you read what I said the whole point of this is to allow all the banks/sovereigns to write down and reduce the loans which they can't do in six months, plus it would obviously be politically untenable so soon after the bailout.
A large US bank just published in the last hour a research piece entitled "Greek Sovereign Debt Restructuring Delayed but Not Avoided for Long" Suggest you go and look for it....might teach you more than looking at a credit derivative model. Not sure where those models price systemic risk, German political risk , French political risk , ECB collateral rules etc etc etc. If yours does you should sell it....you could retire tomorrow.
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