Question: Greek debt

[DRumsfeld2000]

This is from John Mauldin (bold is mine):-

'It turns out from the BIS [Bank of International Settlements] numbers, that the largest holders of Greek debt are French, followed by the Swiss, although my guess is that a lot of that is hedged, and I don't know that the BIS picks that up, and then the Germans. The numbers as of last June were France E86 billion, Switzerland E60bn, and Germany E44 billion. I have seen more recent numbers of France E73b, Switzerland E59b, and Germany E39b. In terms of GDP, for Germany it is minimal - just over 1%. Of more concern, for France it is nearly 3%, and for Belgium 2.5%. For Germany, the debts of Ireland, Portugal and Spain are much bigger problems. They may, however, worry that if there is a contagion, they will have to take marks on that debt. That would be a real problem - nearly 15x the size of the Greek issue."

Does anyone know if this debt is hedged as he mentions? Which countries have hedged and how much? I am particularly interested in Switzerland.

[thunderdownunder]

Re: Question: Greek debt

It seem to be a "debt" that none will jump over -
Bernanke prayer goes like this every day-
Lord,
I have done your work, the work I was sent to do, along with Paulson and that little twerp Giethner, we strive to inflate your Debt so it can be repaid with dust. We have taken your word "Dust to dust ashes to ashes" and made it so for your names sake, burying the American people in debt so they may live your American dream. We have exported the idea to all corners of the World and verily I say they have taken the Bait and Switch and answered our call to spend what we can print. Even though we hold your keys to the printing press and Yey they accept willingly - Lord there is No inflation.
Every day your Follicly challenged Angels at Goldman, who were blessed by your name, Buy and sell to profit, as you decreed, using the gifts you gave of HFT and Algorithms to extract the tithe of 10% yet there is No Inflation.
Lord we pray that you would bless our labor and wake your people so they would buy everything that is good by credit card or false and deceiving contracts so we may inflate the money that we have placed forth on the Earth and Yay there will be inflation.
Lord - Goldman and all that do your good works pray that your will be done to in-debiting mankind by property they can never own and goods that give no warmth so we the Masters of the Universe may live in the mana you have bestowed on us and we give thanks as your humble and very well paid servants.
Lord we try using the PPT to keep the Dow above 10,000 every day at 2.00 pm as decreed using deflated dollars and verily so we burn at the alter the short sellers for we know the offerings are good and the aromas float upward to heaven as do the profits and are pleasing to you, yet Lord there is No Inflation.
Lord, we have kept the faith that the Tribe of Goldman should be fruitful and multiply and go forth into the World to subdue it under its balance sheet and we give thanks you have smite the evil clan of Lehman and given to your blessed, all of the spoils of victory. Yay you have given all of us the power under Heaven to be TBTF but there is No Inflation
Finally Lord we give thanks that we do your works in credit default swaps that blind the foolish and impoverish the nations of the World for your name sake and so bring in the sheaves of tithe we hold in trust via enormous unearned bonuses until you return of course.
But we ask you dear Lord to deliver us from Deflation and give us the tools we need so we may have Inflation because we searched and have found naught.
For yours is the glory and ours is.......... well........ OURS OK and we would like you to keep it that way.
Amen.

PS: If your not to busy a World War would help a heap toward "Deflation by destruction" and "Inflation via profit" in the rebuilding and Christ knows the Carpenters need a contract more than anything. :eek:

(Apologies as a Christian but the Big Fellas laughing along with me)

[raja]

Re: Question: Greek debt

It seem to be a "debt" that none will jump over -
Bernanke prayer goes like this every day-
Lord,
I have done your work, the work I was sent to do, along with Paulson and that little twerp Giethner, we strive to inflate your Debt so it can be repaid with dust. We have taken your word "Dust to dust ashes to ashes" and made it so for your names sake, burying the American people in debt so they may live your American dream. We have exported the idea to all corners of the World and verily I say they have taken the Bait and Switch and answered our call to spend what we can print. Even though we hold your keys to the printing press and Yey they accept willingly - Lord there is No inflation.
Every day your Follicly challenged Angels at Goldman, who were blessed by your name, Buy and sell to profit, as you decreed, using the gifts you gave of HFT and Algorithms to extract the tithe of 10% yet there is No Inflation.
Lord we pray that you would bless our labor and wake your people so they would buy everything that is good by credit card or false and deceiving contracts so we may inflate the money that we have placed forth on the Earth and Yay there will be inflation.
Lord - Goldman and all that do your good works pray that your will be done to in-debiting mankind by property they can never own and goods that give no warmth so we the Masters of the Universe may live in the mana you have bestowed on us and we give thanks as your humble and very well paid servants.
Lord we try using the PPT to keep the Dow above 10,000 every day at 2.00 pm as decreed using deflated dollars and verily so we burn at the alter the short sellers for we know the offerings are good and the aromas float upward to heaven as do the profits and are pleasing to you, yet Lord there is No Inflation.
Lord, we have kept the faith that the Tribe of Goldman should be fruitful and multiply and go forth into the World to subdue it under its balance sheet and we give thanks you have smite the evil clan of Lehman and given to your blessed, all of the spoils of victory. Yay you have given all of us the power under Heaven to be TBTF but there is No Inflation
Finally Lord we give thanks that we do your works in credit default swaps that blind the foolish and impoverish the nations of the World for your name sake and so bring in the sheaves of tithe we hold in trust via enormous unearned bonuses until you return of course.
But we ask you dear Lord to deliver us from Deflation and give us the tools we need so we may have Inflation because we searched and have found naught.
For yours is the glory and ours is.......... well........ OURS OK and we would like you to keep it that way.
Amen.

PS: If your not to busy a World War would help a heap toward "Deflation by destruction" and "Inflation via profit" in the rebuilding and Christ knows the Carpenters need a contract more than anything. :eek:

(Apologies as a Christian but the Big Fellas laughing along with me)

Are you really sure TPTB don't want deflation?
Then they could buy up all the distressed and foreclosed assets on the cheap with their already mountainous stacks of money.

Neither inflation nor deflation will keep the masses happy in the long run, so why will the Financial Elite not take the course that leads to the greatest amassing of wealth?

[GRG55]

Re: Question: Greek debt

This is from John Mauldin (bold is mine):-

'It turns out from the BIS [Bank of International Settlements] numbers, that the largest holders of Greek debt are French, followed by the Swiss, although my guess is that a lot of that is hedged, and I don't know that the BIS picks that up, and then the Germans. The numbers as of last June were France E86 billion, Switzerland E60bn, and Germany E44 billion. I have seen more recent numbers of France E73b, Switzerland E59b, and Germany E39b. In terms of GDP, for Germany it is minimal - just over 1%. Of more concern, for France it is nearly 3%, and for Belgium 2.5%. For Germany, the debts of Ireland, Portugal and Spain are much bigger problems. They may, however, worry that if there is a contagion, they will have to take marks on that debt. That would be a real problem - nearly 15x the size of the Greek issue."

Does anyone know if this debt is hedged as he mentions? Which countries have hedged and how much? I am particularly interested in Switzerland.

The bond holders buy credit default swaps [CDS] to hedge the default risk of the bonds that they hold. By using a CDS the holder of the bond transfers the risk of default to the party that writes [sells] the CDS.

Apparently because these are sovereign bonds the default risk was historically considered quite low, and therefore the cost of buying the hedge was also quite low. On the other side of that trade, the risk of default was also considered low, so some European banks and hedge funds are believed to be large writers [sellers] of CDS derivatives, viewing them as a source of low risk fee income. Now that spreads are blowing out and the risk of the "unthinkable sovereign default" is real, the "AIG question" is rearing its ugly head..."In the event of a default, can these parties make good on the derivatives they created and sold?".