When investors eagerly snapped up $2.75 billion worth of Argentine hundred-year bonds two years ago, they figured the country only had to honor the first 12 years and they’d be fine. Seemed a pretty decent bet to some: After all, Argentina defaults at an average rate of once every 16 years and 8 months, giving them a nice four-and-a-three-quarter-year cushion. Also, the country had just elected an avowedly pro-business president who was sure to fix everything right away and usher in a new era of capitalist success and on-time-bill-paying.
It has all worked out so well in one heavily-indebted crisis-racked country that recently elected a pro-business leader that the bond market thought it would be good to give another a try. And rather than waiting around to see exactly how many years it would have to wait before losing money on the bet, it just decided to lose the money upfront.
The Greek government issued €487.5 million ($535.31 million) of three-month debt at a yield of minus-0.02%....
The election of a pro-business, center-right government under Prime Minister Kyriakos Mitsotakis this July has further contributed to a sense that normality is returning….
Doubts remain over the sustainability of Greece’s debt in the long term, because its huge, cheap bailout loans from eurozone governments must eventually be replaced with market financing at uncertain cost….
“If Greece continues to do well and credit risk continues to go down, you could see rates go even more negative,” Mr. Farmakis said.
That last sentence definitely follows logically from the one before it. And we’re not even sure about the one before that. Yes, as with Argentina before it, capital likes to reward voters for doing what it wants, but we know who the real hero of this story is: Yanis Varoufakis. Sure, none of the former Finance Minister’s more wild plans ever bore fruit, and sure he was forced to leave office in semi-disgrace, and sure his old boss kept swallowing all of the austerity medicine Tante Angie insisted on administering, and sure his European Realistic Disobedience Front only managed to just sneak into Parliament. But without the specter of Yanis and his wardrobe and motorcycle haunting Europe, maybe the Germans would have decided to roast Greece like a garlicky leg of lamb, while the Dutch stood by an tsk-tsked as only the Dutch can. And then there’s probably no Greece around to steal investors’ money today. History works in mysterious ways, and none is more mysterious than Yanis.