http://www.telegraph.co.uk/finance/debt-crisis-live/9026792/Debt-crisis-as-it-happened-January-20-2012.html
23.00 Greek finance minister Evangelos Venizelos has emerged from the meeting with Greece's creditors, and it looks like everyone is giving up for the night with no resolution. Mr Venizelos said the talks will be carrying on tomorrow.
20.50 Greek debt talks are still going on and focusing on legal issues and collective action debt clauses, according to sources. Discussions are set to continue over the weekend.
19.21 Just to round up the Greek debt talks going on at the moment.
Today, Prime Minister Lucas Papademos met for a third day with negotiators from the Institute of International Finance, which represents the private creditors who are being asked to take a loss on their bond holdings to lighten Greece's debt load by €100bn.
A government spokesman said the the country is confident a debt relief deal with private creditors that is crucial to avoid default can be reached "very soon".
The bullet point at 20:50 is a key - if talks around a collective action clause are ongoing , they aren't getting hedgies to agree to a 70 percent haircut.
http://www.creditwritedowns.com/2012/01/roubini-greece-credit-event.html
ReplyDeleteNouriel Roubini and Ian Bremmer spoke to Bloomberg Television’s Margaret Brennan about the state of the global economy. Roubini said that the "probability of a recession in the United States is lower than 60 percent right now." On Europe, he said that even if an agreement is reached on Greece, "there are going to be so many holdouts that then they’ll have a problem" and "either way you’re going to get a credit event."
This is my take as well. In Europe, the concern has to be more Italy and Spain and whether the periphery can meet deficit targets given the poor economic outlook in the euro zone.
Here’s what Bloomberg writes about the interview:
Roubini on Greece:
"Even if they reach an agreement there are going to be so many holdouts that then they’ll have a problem. They’ll either pay the holdouts and that becomes expensive, or if they don’t pay them you’ll have a series of defaults, because they’re going to stop paying them. Or the way to avoid the holdouts from being holdouts is then to change domestic legislation, to cram down the terms of the majority on the holdouts. But if that happens then the CDS will trigger and that becomes a credit event. So either way you’re going to get a credit event."
"The credit event can be two forms, either a form of default…another one is if there are holdouts and you don’t pay them and technically that’s a default on the bonds on which you don’t pay so there’s a series of defaults on which you don’t pay. Or three, if you change the terms of the bonds through legislation then that’s considered a credit event by ISDA by the event triggering the CDS. And one way or another you get a credit event. One extreme is a default, another one is CDS triggering."