By: Daryl Montgomery
Once again Greece has avoided a messy default and once again its creditors have had to take a greater loss on their loans and once again standards had to be abandoned to make the deal go through. And once again, we’re not done yet.
Realistically, Greece is actually undergoing a messy default; it’s just doing it in slow motion. When creditors are not fully paid, there is a default. The original default terms ...
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By: Daryl Montgomery
As the situation in Greece deteriorates further, Moody’s announced today that it intended to downgrade 114 European financial institutions and 17 global banks. Hopes that China will buy up EU sovereign debt to help prop up the faltering eurozone may wind up costing the U.S. more than it does China.
The hostility between Greece and the EU/IMF/ECB bailout troika is palpable. Nevertheless, there are claims that a deal should be reached by Monday. Whether the ...
Read On →By: Daryl Montgomery
No government is of course going to admit that it is going to default.
If it did, no one would purchase its bonds and this would cause an immediate default. It is not surprising that the Greek government is denying the obvious,
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By: Daryl Montgomery
Like the U.S., the EU has run out of borrowing power, so debt without money printing is no longer an option.
Weaker economies mean more downgrades from the ratings agencies can be expectedand worse-default
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By: Daryl Montgomery
The Greek bailout deal is once again falling apart. Whether or not it is patched together another time, the end will inevitably be an ugly default.
On Thursday, news sources around the world were trumpeting that the EU and Greece had come to terms that would allow Greece to receive a 130 billion euro bailout payment that would prevent the country from defaulting by March. But late in the day, EU finance ministers ...
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By: Daryl Montgomery
The current debt crisis that is now impacting the entire Euro-Zone started in Greece in late 2009. The problems there have yet to be fixed despite numerous mainstream media reports to the contrary in the last two years.
The EU’s debt crisis is not getting resolved because it is no more possible to solve a debt crisis with more debt than it is to sober up a drunk by giving him more alcohol.
By: Daryl Montgomery
1. Problems in Greece and Europe are still impacting the market negatively with the seeming never ending on again, off-again possible bailout and a market that will stay erratic.
2. FYI – Sideways trading (also known a basing) shouldn’t surprise Investors. It is the norm and not the exception. Most of the time markets are trendless and you need to be a short-term trader and willing to enter and exit your positions quickly ...
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By: Daryl Montgomery
Once again the EU has come up with a too-little, too-late solution to deal with its very serious debt crises. Proposals for a tighter fiscal union and the small amount of funds committed will only delay the inevitable default.
Treaties only have meaning if their terms are actually followed. The eurozone already has a treaty that created it. That treaty has very clear fiscal benchmarks that all members must follow. The key benchmark concerning a maximum 3% debt to ...
Read On →By: Daryl Montgomery
•Greek bailout timeline supposed solutions:
May 2010 – €110 billion
July 2011- €109 billion, plus 21% bondholder loss
October 2011 – €130 billion, plus 50% bond loss for creditor other than EU/IMF
•Referendum crisis arises only 4 days later
•One-year interest rates in Greece before Oct plan as high as 193%, fell to 154%, then rose to 206%
•Hard default would be around 75% or more
•Would be bigger than Russian default in 1998
