Greece and its debt restructures is like a zombie you just can’t kill
The problem has been around in markets now for five years and despite all the debt write-offs, favourable loans, cheap interest rates, asset sales and political spin, Greece’s debt has risen from 137% of GDP in 2010 to 180% today. According to wire services, the creditors have agreed on a proposal to put to Athens which may be presented as a ‘take it or leave it’ option. And to make negotiations more interesting, the Greek PM has his own (undoubtedly more lenient) proposal and has said he will not accept any ultimatum. Investors remain more nervous than at any stage over the past five years on this issue, but that does not explain the price action in European bond markets overnight. The yield rise there was due to positioning and liquidity more so than inflation and default worries and followed a sharp rise in US yields in the previous session. This highlights that liquidity, and your ability to sell a position, is something you only value when you don’t have it. (VIEW LINK)
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