Will Greece get its 130b Euro 3rd bail out?

Discussion in 'Business & Economics' started by Saint, Jan 12, 2012.

  1. Saint Valued Senior Member

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    Will Greece get its 130b Euro 3rd bail out?
    If NOT, will it default all its dent and pull out from Euro zone?
     
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  3. Ghostintheshell Registered Member

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    Probably that is what will happen, so NO! NO BAILOUT! Thats why the UK didnt want to contribute money to the cause when default was inevitable anyway - its basically just throwing money into a hole. It's unfortunate that Greece has been hit that hard but other European nations have been trying to help to no avail so there has to come a point when you need to step out of such things to avaid going down with the ship so to speak - or in this case, allowing one member of the ship to significantly increase the chances of sinking it.
     
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  5. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    More pressing & possible answer to thread's question is:

    Greece needs to pay back 14.5 billion euros maturing March 20 or get debt holders to accept less as payment. For example accept a 50% LOSS.
     
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  7. Saint Valued Senior Member

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    Who will lend Greece money again? I mean, any bank will do that?
     
  8. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    A creditor who accepts $1 for every $2 due him is given a dollar to Greece - a better deal for Greece than lending a dollar to Greece.
     
  9. kmguru Staff Member

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    Even if Greece problem is solved in the next six months,,,,then what happens next year and year after?
     
  10. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    "... Finance Minister Gerardo Rodriguez said on Friday G20 officials, who met in Mexico City on Thursday and Friday, did not discuss specific details on increasing IMF resources.*

    The IMF is seeking to more than double its war chest by raising $600 billion in new funds to help countries deal with the European debt crisis. But the plan faces roadblocks from the United States and other countries.

    Rodriguez said the meeting, which included officials from the world's biggest economies and major emerging market powerhouses such as China and Brazil, was "a good starting point." ..." From: http://news.yahoo.com/g20-toward-more-imf-funds-mexico-212847755.html

    Problem is Brazil and especially China want something in return for loans.* Brazil wants a permanent seat on the UN's Security Council and China wants, at the least, that the RMB is part of the IMF's SDR mix. - a big step towards making it the world's reserve currency, but unlike some other steps, that still allows China to keep they RMB pegged to the dollar - not freely traded in foreign exchange markets.

    * A few months ago, Brazil did discuss lending 10 billion (of its ~350 billion dollar reserves) to the IMF but generally there was not much support for that. Mainly the irony of the IMF begging Brazil for help was making it attractive to some. (About 10 years ago, IMF had controllers in Brazil telling what Brazil could and could not do with funds the IMF was lending to Brazil.)

    *Talking about the problem is easier than doing some thing meaningful - like lending 600 billion to ECB etc. If there is a solution, it will have a lot of pain for some people. More bad news is:

    "... Chief negotiators for Greece's private creditors left Athens Saturday without a deal on a debt swap plan that is vital to avert a chaotic default, sources close to the negotiations told Reuters. ..." from: http://news.yahoo.com/greeces-creditors-leave-athens-talks-continue-133626371.html

    Billy T comment: Part of the problem is that "chaotic default" transfers some of the pain AWAY from the bigger creditors and to the financial institutions which sold them credit default swaps (the strange name for insurance policies that will pay back to the creditor full face value of the loan, if there is a legal default.) That means some big pain which my break some to these financial institutions. Thus the creditors are divided - some WANT chaotic default, others don't. Credit default swaps are not recorded anywhere, have little market, etc. so no one really knows who is "on the hook" for what.

    About the only thing good in all this, is that it has taken the spot light away from the US's foreclosure uncertainties / serious problems. - I.e. fact that most mortgage are not now owned by the original writer of them so increasingly more people threatened with foreclosure are going to court and demanding the bank or other writer of the mortgage prove the money is due to them before the eviction order is processed.

    Typically tiny parts of each mortgage, which was sliced and diced in investment packages, (CDOs) is owned by hundreds of different investors. In New England courts, home owners are winning their cases - don't need to pay, bank or other mortgage writer cannot foreclose, evict etc.
     
    Last edited by a moderator: Jan 21, 2012

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