Comments on: Greece won’t go Argentine A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: z4ujxs Fri, 09 Apr 2010 18:53:01 +0000 The logic here is sound in a world where one can identify and isolate the risks. The consequences of whatever action is taken with Greece are hardly known however. Minimizing those risks begins to sound eerily familiar to me as the same language used when delinquencies and defaults were spiking higher on subprime mortgages. “It’s a relatively small exposure to the larger market…”, “The risks are isolated and contained…”, “We do not see any evidence of contagion from subprime fallout…”

The sandpile will shift and no one can be quite sure what the implications will be. Given that fact, global risk premia appears to be severely mispriced here. Memories are short.

By: wpw Fri, 09 Apr 2010 15:58:00 +0000 Do traders trade on the basis of whether Greece will default? Or on whether perception of the risk of Greece defaulting will increase?

By: y2kurtus Fri, 09 Apr 2010 15:52:32 +0000 “what we’re really talking about here is the sovereign equivalent of a loan modification which, if it goes according to plan, makes both the borrower and the lender better off.”

When a lender (like the local customer owned savings bank I happily work for) does a loan mod 99% of the time they are doing that because payments are not being made. Some money is better than no money and so loan mods are going to be better than alternitives.

Holders of Greek debt are currently being paid. It’s a heck of a stretch to tell someone that 80 cents is better than a dollar, that their 5 year bonds are now 15 year bonds, or that their 5%’s are becomming a 4%’s

What I would love to see from you would be a contrast between Greece and the UK or the US. What %of GDP do they spend on goverment and what % do they collect in taxes? Here in the states that spread is getting wider than many think prudent.

Keep up the great writing!