Felix Salmon

The euro crisis comes to a head

By Felix Salmon
September 12, 2011

Spiegel has an excellent, long, and detailed article about the tension at the heart of the euro crisis — the one between Greece and Germany. Europe has thrown $150 billion at Greece to date and has nothing to show for it except for a temporarily averted sovereign default. If that kind of money continues to rain down on Greece, the outcome will be similar — immediate crisis averted, but no real change in terms of the Greek sovereign finances. Austerity, it turns out, is working exactly the way it always does: it’s slowing down the country and making any recovery pretty much impossible.

Europe’s lethal uncertainty

By Felix Salmon
September 6, 2011

As markets plunge again today, ostensibly on existential worries about the eurozone, you might want a plain-English explanation of what the root of the problem is. And John Lanchester is a great place to turn for such things:

Greece datapoints of the day

By Felix Salmon
August 30, 2011

Nikos Tsafos has a fantastic post at his Greek Default Watch blog entitled “Ten Surprising Facts about the Greek Economy”. I normally hate listicles, but this one’s very good. For instance: it’s bad enough that Greek GDP won’t go back to its 2008 peak for the best part of a decade. But it’s worse that the two big drivers of Greece’s economy — tourism and shipping — are down 28% and 27% respectively in real terms since 2000.

The curious Greek bond price chart

By Felix Salmon
July 26, 2011

greekgovt.jpg

Many thanks to Van Tsui and Scott Barber for putting this chart together for me. We’re all used to seeing yield curves — charts which show the yield, for any given credit, at various points along the maturity spectrum. This chart is different: it’s a price curve. It just shows the price at which Greek bonds are trading, plotted according to their maturity.

Adventures with Greek restructuring math

By Felix Salmon
July 26, 2011

What does it mean, when a bank takes a 21% haircut on its Greek debt? With the release of Deutsche Bank’s results yesterday we have an interesting case in point: the bank took an impairment charge of €155 million on its Greek government bonds. That’s just under 10% of Deutsche Bank’s stated €1.6 billion in Greek sovereign exposure.

The CDS market and Greece’s default

By Felix Salmon
July 22, 2011

ISDA has made the right decision: the Greek bond default does not and should not count as a “credit event” for the purposes of whether Greek credit default swaps will get triggered.

Greece defaults

By Felix Salmon
July 21, 2011

The latest Greek bailout is done — the official statement is here — and it involves Greece going into “selective default,” which is, yes, a kind of default.

Why Lagarde got the IMF job today

By Felix Salmon
June 28, 2011

For me the interesting thing about Christine Lagarde becoming the new managing director of the IMF is not the news itself. I said she’d get the job as long ago as May 15, and I’ve considered her a lock since May 20. Rather, the interesting thing for me is the timing: everybody expected the announcement on Thursday, the 30th, but instead it came today, the 28th. Why push things up?

Greece’s messy muddle-through continues

By Felix Salmon
June 24, 2011

The one thing you can be sure of, when it comes to the latest episode in the ongoing saga of the Greek bailout, is that it’s a mess. The WSJ is reporting that the bailout is secure, while Reuters is a bit more cautious, just saying that a deal is “closer”. Everybody knows what needs to happen — but a crucial vote in the Greek parliament still hasn’t happened, and the role of private-sector banks going forwards is also extremely vague: