When the Markets cry wolf, Beware of the Markets!
EIU: Restructuring of the Greek depth seems unavoidable
11. December 2010. | 08:52
Author: Spyros Damtsas Dr.
Restructuring of the Greek depth seems for many analysts unavoidable and additionally for the Economist representative a haircut of 40% of the Debt would be necessary.
Countries face “little red riding hood” doom scenarios of a financial Take-Over.
In a few days interval voices about restructuring Greek debt were heard very loudly in the Greek capital.
MR. Roubini in his sharp and uncompromising style told his views directly to the PM George Papandreou. I
n addition to that in the Economist conference on the Thursday 9th Megan Greene expressed the “objective” views of the Markets that the Economist Unit of the renown magazine represents.
Restructuring of the Greek depth seems for both unavoidable and additionally for the Economist representative a haircut of 40% of the Debt would be necessary.
All this statements followed a visit by the Director of the IMF Monsieur DSK that reassured Greece that an extension of its repayment of the Bailout funds that are due by 2013-4 was possible even certain at least for the funds lend by the IMF.
So what the Buzz for? Why cry now about the impossibility of repaying the Greek debt. Is it because these matters are better managed early before creating more debts and false hopes? Or are we in a process of what a big company could name as a preliminary to an aggressive take-over? What is a spread that mounts to unprecedented tops for the risk of a country member of the eurozone default?
The self fulfilling prophecy of the markets is a well known and extremely lucrative process.
In fact none can contest Roubini s ability to analyze and predict. In addition one should praise his interventions for their boldness and accuracy that are not always pleasant to the markets ears.
Still the question remains for the other market institutions such as the Rating Agencies and some specialized economic medias like the Economist, very close and interrelated to the markets logic. What is the real game in town to which the states have to respectfully abide?