What were Greek bonds at when help needed to be brought in?

Joined
Feb 21, 2003
Messages
4,249
Website
www.politics.ie
Twitter
davidcochrane
Bit of a question here, what were the financial circumstances leading to the intervention in Greece? What were their bonds at when the panic button was hit for them?
 


Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,885
10%, less than 2 weeks when they surged past 8%
 

robut

Well-known member
Joined
Apr 6, 2008
Messages
8,729
I think at the moment its a bit academic and does not mater what OUR bonds are at right now? A few months into the new year will be different however. Maybe by then the Yield % will have dropped below 5% :D - ( Im trying to be optimistic )

I dont think greece were "financed" until mid next year like us at the moment. If we were not financed at all right now THEN I would say we would be negotiating / in the midst of the ESF / IMF intervention.

Robut
 

dubboy

Member
Joined
Oct 19, 2010
Messages
87
Bit of a question here, what were the financial circumstances leading to the intervention in Greece? What were their bonds at when the panic button was hit for them?
They asked for help when their yields were at 8.85% but that's cos they were going to the market to raise money a couple of days later, they rose to 12% very quickly after that.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,885
They had a wall of debt hitting them in May that had to be rollovered.

But we do rollover €160 Billion worth of short term commercial papers every year, could this be an issue now? I though they were Euro backed CPs?
 

orbit

Well-known member
Joined
Dec 5, 2008
Messages
700
I think at the moment its a bit academic and does not mater what OUR bonds are at right now? A few months into the new year will be different however. Maybe by then the Yield % will have dropped below 5% :D - ( Im trying to be optimistic )

I dont think greece were "financed" until mid next year like us at the moment. If we were not financed at all right now THEN I would say we would be negotiating / in the midst of the ESF / IMF intervention.
People just don't seem to get this. Domestically, it's the likes of RTE saying the "interest on our debt has just risen to x %" and elsewhere, people believing d!ckheads like that guy on Bloomberg yesterday.
 

Tigris Celtica

Well-known member
Joined
Aug 26, 2009
Messages
503
I see our bond rates shot up again the morning after Lendahands "performance" on Newsnight last night.

Paxman was right - Nobody believes Lendahand anymore. Last night he reminded me of Comical Ali's performance just before the Americans rolled into Baghdad ! .:lol:
 

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
the greek 10 year graph is over here:

GGGB10YR: Greece 10 Year Summary - Bloomberg


note the spike in May - where it pulled back from over 12% down to about 7% is where the intervention happened.


However - note the gradual upward momentum back towards that high in the subsequent months... and thats despite the intervention.

What this implies is that Greece is basically on IMF and ECB life support , and is cut off from the international bond markets.
 

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
dear god... the bonds have spiked up again today, after Lenihans newsnight appearance.

Nobody believes him ... its now at 8.3%
 

adrem

Well-known member
Joined
May 27, 2004
Messages
924
Bit of a question here, what were the financial circumstances leading to the intervention in Greece? What were their bonds at when the panic button was hit for them?

It wasn't the nominal level of their bond yields per se that caused them to look for help it was the lack of liquidity in the market to meet immediate borrowing requirements. Although many posters disbelieve everything (unless it is said by their choice from FG, LAB, SF etc) the fact is we are funded until summer 2011 so we don't need to borrow until then and as such the current yield movements are immaterial.
 

Social Conscience

Well-known member
Joined
Oct 27, 2010
Messages
1,273
Didn't see Lendahand's performance last night. What total and utter BS was he spouting now?
 

A view from England

Well-known member
Joined
Apr 14, 2010
Messages
2,056
People just don't seem to get this. Domestically, it's the likes of RTE saying the "interest on our debt has just risen to x %" and elsewhere, people believing d!ckheads like that guy on Bloomberg yesterday.
Although the Government does not have to go to the markets (or ECB ;)) until early next year, high bond rates prevent it from going in early. Therefore, the pressure mounts on the Government (or NTMA) as the bond prices fall and rates raise because the timescale to deal with the issue shortens. It's a bit like you remortgaging when rates are low to get security for the future. You wouldn't wait until rates were high to remortgage, would you? The high bond rate prevents the Government going in at a low rate. It matters a great deal, even if the actual transactions are not due for a few months. It is also indicative of what the markets believe the risk of Ireland defaulting is. This is a political issue as well as a financial one as it gives opposition parties a stick to hit the Government with.
 

john_galt

Active member
Joined
Jun 16, 2010
Messages
137
Bit of a question here, what were the financial circumstances leading to the intervention in Greece? What were their bonds at when the panic button was hit for them?
Sorry David, but the rate was a bit of a misnomer, the 10yr bond was about 10%, but the fact that the curve was inverted meant that they could not even borrow short term to buy some time. The 2 yr was over 15% at that time.

Our curve is still upward sloping, though marginal, so if we see our short term rates being higher than longer term, then it is panic time.
 

orbit

Well-known member
Joined
Dec 5, 2008
Messages
700
Although the Government does not have to go to the markets (or ECB ;)) until early next year, high bond rates prevent it from going in early. Therefore, the pressure mounts on the Government (or NTMA) as the bond prices fall and rates raise because the timescale to deal with the issue shortens. It's a bit like you remortgaging when rates are low to get security for the future. You wouldn't wait until rates were high to remortgage, would you? The high bond rate prevents the Government going in at a low rate. It matters a great deal, even if the actual transactions are not due for a few months. It is also indicative of what the markets believe the risk of Ireland defaulting is. This is a political issue as well as a financial one as it gives opposition parties a stick to hit the Government with.
Clearly that is why the government is out of the market for the moment and won't be returning in the immediate future. But, take a look at the other active threads here, where people are expecting that a deal with the IMF is imminent, when patently that makes no sense, except for people who don't know or don't understand the government's funding position. There won't be any deal with the IMF unless and until we are close to running out of money.
 

Ulster-Lad

Well-known member
Joined
Oct 26, 2006
Messages
9,989
Irish pension deficits doubled in 2010

The deficits of defined benefit pension schemes more than doubled in 2010, according to a report today from Lane Clark and Peacock Ireland (LCP).

It said that the deficits of defined benefit pension schemes sponsored by Ireland's largest private sector companies and most significant state-owned bodies rose by an estimated E9bn since January 2010 to approximately E16bn at 30 September 2010.

This reflects the further dramatic falls in AA rated bond yields in the Eurozone area during 2010, it said
BUSINESS WORLD - Irish pension deficits doubled in 2010

The bad news just keeps coming at the moment.
 

A view from England

Well-known member
Joined
Apr 14, 2010
Messages
2,056
Clearly that is why the government is out of the market for the moment and won't be returning in the immediate future. But, take a look at the other active threads here, where people are expecting that a deal with the IMF is imminent, when patently that makes no sense, except for people who don't know or don't understand the government's funding position. There won't be any deal with the IMF unless and until we are close to running out of money.
+1. The IMF/ECB will step in just before a default and then only to save the EU banks exposed to Irish debt. The IMF will not do Ireland any favours in the short to medium term.
 

DaveM

Well-known member
Joined
Sep 16, 2010
Messages
15,963
the greek 10 year graph is over here:

GGGB10YR: Greece 10 Year Summary - Bloomberg


note the spike in May - where it pulled back from over 12% down to about 7% is where the intervention happened.


However - note the gradual upward momentum back towards that high in the subsequent months... and thats despite the intervention.

What this implies is that Greece is basically on IMF and ECB life support , and is cut off from the international bond markets.
I thought I heard a news report saying Greece were due to return to the bond market in the next week or so... am I wrong?
 

nuj

Well-known member
Joined
May 26, 2004
Messages
518
as such the current yield movements are immaterial.
Unfortunately they are. Irish 10-year now at 8.75%, up from 8.25%ish at close yesterday.

That's not the move of an orderly market, and disorderly markets (whether good value or not) tend to repel investors.

We keep hearing that "markets hate uncertainty". Well, they don't. Without uncertainty there'd be little need for markets. What markets hate is volatility - the prospect of, not so much losing money, but losing it in a trice.

Ireland is now volatile.
 


New Threads

Most Replies

Top