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2012年1月16日 星期一

(Chapter 15)Nine euro area countries, sovereign rating is Standard & Poor's reduced; Do you know the fuse is?

Readers should remember that, according to the progress of writing, this issue should write the "carry trade."

As the Standard & Poor's sovereign rating in nine European countries to reduce, touched sensitive nerves of financial markets, many people are nervous, so the temporary changed the subject, please forgive me.

European Union and the euro zone in January 20, 2012, experienced a "Black Friday", nine countries have the euro area sovereign rating by Standard & Poor's reduced, do you know the fuse is?

This is due to: the Greek government and the "Institute of International Finance," the representative of the negotiations to fail.

"Institute of International Finance" is a "hedge fund" negotiator.

Greek government bonds, as prices continued to fall, eventually, the majority of hedge funds into the pockets.

These hedge funds are the embodiment of wolves; their possible risks are clearly calculated.

Greek Government's original plan is to use high-pressure methods in an attempt to force hedge funds to reduce debt 50% automatically.

However, these hedge funds, would rather hope that the Greek government announced default, so by default swaps, to sell CDS insurance company or financial institution to obtain the full amount of compensation.

January 16, 2012. French President Nicolas Sarkozy and German Chancellor Angela Merkel met in Berlin, they want the European Union in the March 1, 2012, entered into closer financial ties, multilateral agreements and a formal response, the Greek Government requested the "Tripartite Foundation ", approved as soon as possible, set aside the second emergency loan, want to temporarily solve the problem.

Greek government, failure of the negotiations with hedge funds, 50% of the Greek government's desire to reduce debt, has finally come to nothing.

Therefore, the Greek government cannot obtain the European Union, European Central Bank and the International Monetary Fund, a "three groups", the second worth 130 billion euro emergency loan.

As the negotiations the two sides of the spindle, not in the same orbit, and finally, of course, the negotiations broke down. Then they whipped up a storm.

However, I always felt that the Greek government still has the ultimate solution to resolve the current impasse.

Greek government, in fact, can immediately introduce legislation to enact legislation, as long as a certain percentage of the government in obtaining the consent of the private sector, the equivalent of all the private sector, voluntary 50% cut debt provisions;


And must be in accordance with the conditions laid down by the Greek government, the private sector have, the old Greek bonds into new bonds, and re-set period of 30 years or more long-term Greek government bonds.

However, the Greek government, the private sector the ability to obtain adequate support, this is really to be the leader of the Greek government or the mediation of Europe.

I believe that if this approach are ultimately fails, the Greek government bonds in addition to that breach of contract, is no choice.

Note to reader: the disintegration of the euro is not in the short term, because this is a major event involved in the global economy, world leaders will not turn a blind eye to.

However, the euro exchange rate fluctuations, it is inevitable. The author comments in the future, indicating that the euro will not cause the disintegration of the short term.


My blog published on this site all content is purely personal opinion to share, did not constitute investment advice for any person.