• 28 Feb 2013 at 5:28 PM

Euro-Zone Stays Growth-Free

The euro-zone is going for a fourpeat. Read more »

  • 22 Feb 2013 at 4:16 PM

Eurozone Edges Ahead in Race to Bottom

The eurozone is poised for an historic achievement, and it didn’t even need a fiscal cliff, sequester or irresponsible government-by-brinksmanship to do it. Read more »

  • 03 Dec 2012 at 3:44 PM

Greece Sells Low, Buys High

Here is a thing that might be worth considering about this here Greek bond buyback:

That’s the entire history of the shortest-dated of bonds targeted for a buyback at, you might notice, their all-time high price.1 Various people have various reactions to this but one reaction that no one can have is of the variety of “well, I paid more than that to buy it, so I’m not selling it to you for less, since I live in a non-mark-to-market dreamworld.” Nobody paid more to buy these bonds than Greece is planning to.2

At least, not in money. Some people paid for these bonds in suffering; others – most others – paid for them in the form of old Greek bonds, which once upon a time were, I guess, worth 100 cents on the dollar. Later, they weren’t. Eventually they were rounded up in a restructuring where every €1,000 of old bonds got exchanged into €315 face amount of new bonds, €150 face amount of let’s say par-ish EFSF notes, and €315 face amount of Greek GDP-linked securities which were worth around nothing. The total package was worth around €210-250, depending on what day you looked at it, which if you do the math assuming the EFSF bonds were worth par and the GDP warrants zero, gets you a value for those new bonds of €60-100, or 19 to 32 cents on the dollar of face amount.3 Read more »

Evangelos Venizelos, who was brought in as Finance Minister of Greece just two weeks ago…reinforced the importance of euro zone membership to the country and said: “We are a member of the European Union and a member of the euro zone. This is definitive and not a reversible situation.” [CNBC]