Greek bonds are continuing to rise. Their yield is almost 10%, up about a full point in the last 5 trading days. Investors do not believe the Greeks have their act together yet. The Greek stock market took a dive yesterday, dropping about 3.6%. Greece has a roughly ten billion dollar bond coming due in three weeks and they can't pay it off, so they will need to borrow money to refinance it. They will be borrowing money at the new, much higher rates.
All of the screaming and rioting and protesting done by the Greeks who have fought the austerity measures accomplished nothing. Inexorably, the mathematics of the situation devoured their efforts and marched on.
You have to pay your bills or face the consequences. Throwing temper tantrums doesn't absolve you of your need to rollover all of the debt you've accumulated.
2 comments:
Some humor to brighten your day. According to John Mauldin, The Greek government has been in default 105 of the past 200 years.* Juxtapose that with the repeated claims from Eurocrats that Greek default is "unthinkable." I'm thinkin' it's pretty thinkable.
*That does not mean they defaulted 105 times. Also there's a bit of a problem with 200 years, as the birth of the modern Greek state was about 190 years ago. I guess if you count all those loans from Lord Byron and friends, you can get back 200 years.
The amazing thing is that someone thought it was a good idea to let them into the EU. Talk about a fiscal boat anchor!
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