THE GREEK private sector involvement (PSI) plan, the process under which banks and other bondholders will take losses, last night claimed sufficient take-up for collective action clauses (CAC) to be triggered, which would force all holders of Greek law bonds into the restructuring plan. If CACs are triggered this morning, where does this leave Greece?
The answer is, unfortunately, not in a much better position.
[…]
[E]ven if the 95 per cent participation rate [in the Greek law bond swap] is met and the banks are returned to some semblance of stability, this is still a terrible deal for both Greece and Eurozone taxpayers. It has sown the seeds of a major political and economic crisis at the heart of Europe, further threatening the stability of the Eurozone.
This would, perhaps, have been acceptable were it not for one nagging detail: this plan will not save Greece.
Via
Update: ISDA Says Greece In Default, CDS Will Trigger (h/t Nick)
Cut the rope and let that country go. Sheesh!
Then watch domino effect ?. Could be some great TV.
What possible market could still exist for any Euro zone paper at this point? Anything happens and they force you to take a huge haircut, call the problem “solved” and keep spending into oblivion. Who the hell is buying this paper at any price? I wouldn’t want it for free.
james
“What possible market could still exist for any Euro zone paper at this point? Anything happens and they force you to take a huge haircut, call the problem “solved” and keep spending into oblivion. Who the hell is buying this paper at any price? I wouldn’t want it for free.”
Yep! There ya go……..
Update at Forbes: “ISDA says Greece In Default …”, via Instapundit.
I was never worried about Greece; I was worried about the credit default swaps. I wonder how banks will try and weasel out of paying those.
Dave@6:53:
Can you please explain this, slowly, for those of us who are hard of thinking?
did the greeks just run out of other peoples money:-))))
Time to tell the Greeks that negotiations are over,either accept the deal or declare bankruptcy and suffer all that goes with that choice.They know what the choices are,they just hope that the rest of Europe will sweeten the deal a little more before its finalized.As long as negotiations continue the Greeks are in the drivers seat,and they know that.Tell them they have 48 HRS to accept or reject and see how fast they come to an agreement.
The question is not IF Greece goes bankrupt, the question is WHEN.
Delaying the inevitable will just make the pain worse and make the recovery longer.
Greece must go bankrupt, then go back to the drachma.
Bankruptcy is to Capitalism what Hell is to Christianity.
A nasty, but essential, part of the system.
“…this plan will not save Greece.”
Duh, no kidding! This is news???