Greek bonds top 11 percent, approaching one-year high

[Kringle]

http://www.bloomberg.com/apps/quote?ticker=GGGB10YR:IND

congrats!

[Lucky Luciano]

1. Yep...been noticing that myself. Curve has been

Humpshaped the last few days with 2y higher than the 10y and both less than the 4y rate. Really pretty flattish overall with the whole curve within 150 bps or so at such a high rate. Not as bad as a couple months back when the 10y was about the same but the 2y was around 18%.

[Kringle]

5. some things to keep in mind

there was never a secondary market,
sales were direct placement with institutions

there are only one or two buyers,
Germany and/pr the ECB

fund managers may be forced to sell,
to get junk off the books

[dkf]

2. Not again...

How many times do we have to go through this?

[Kringle]

6. it never went away .nt

[dkf]

8. The stock market put in on the back burner for a bit.

[A HERETIC I AM]

3. USA 30 Yr, 8/3/1984 = 12.79 %

http://www.federalreserve.gov/releases/h15/data/Weekly_Friday_/H15_TCMNOM_Y30.txt

Yup. Yields are high. Greece has its problems.

So did we.

It ain't the end of the world.



The end of the world can be found on a daily basis on the SMW thread in the LBN forum.

[Lucky Luciano]

4. Nice to see you man!

You should rethink that though. Given that all of the EU has the same monetary policy, the Greek rates should be viewed relative to the safest benchmark in the EU which is Germany. The German 10y is 2.18, so that 11.01% yield for the Greek 10y is now more in context. Having such a high rate on a deflationary backdrop is all default risk. That 30y rate for the US that you quote from 1984 was from a highly inflationary backdrop that had nothing to do with default risk. It really is comparing apples and toasters.

Good too see you around though...have not seen you for a while. Hope you are well.

[A HERETIC I AM]

7. Good to see you too. Thanks for the correction.

You're right, Greece does have a much higher default risk than Germany these days. I was just trying to point out that high yields on long bonds don't necessarily mean the imminent collapse. Having said that, I lived in Greece in the 1960's and know that in many ways, little has changed in Greek society in the last 45 years, much less the last few centuries. They have a huge problem simply collecting taxes from the average Greek, not to mention the middle class. Hosting the Olympics a few years ago caused them to overspend by a furlong, no doubt.

The biggest problem I have read about re: the Euro and the various nations sovereign debt that makes the most sense to me is the following comparison to the European Union and the US;

If an American in Detroit loses his job at an auto plant in Flint, he can, within reason, move to Alabama and get another job at another auto plant while still speaking the same language and being able to get along with his fellow citizens. The same is not the case with the EU. A Greek or Spaniard or Italian that loses his job can not so readily move to Stuttgart and get a job at a Mercedes factory. He has language and cultural barriers much larger than any American has.

Their debt issues suffer the same fate. That debt which was issued in Drachmas 15 years ago is of little or no interest to a investor in Amsterdam or Stockholm today, even though it may now be redeemable in Euro.

This is at least how I understand part of their problems.

I hope your new job is going well. I read with interest your recent thread about hiring the intern. If I am not mistaken, you're now working in CT, right? You can't swing a dead cat without hitting a relative of mine in that area!

As far as how I am doing, we should leave that to a PM!

All the best.

[dkf]

9. Nice analysis. Thx.

[Kringle]

10. Euro-USD ,,,,, 1.2630 ...nt

[Kringle]

11. update.. 11.41 ............. lets try for 12 .. go Greece