Meltdown fears for euro as G20 makes plans for Athens to default on debt

[xchrom]

http://www.independent.co.uk/news/business/news/meltdown-fears-for-euro-as-g20-makes-plans-for-athens-to-default-on-debt-2360641.html

The world's leading economic powers are moving towards an acceptance that Greece will default on up to half of its €350bn sovereign debts, according to reports from meetings in Washington yesterday. They are believed to be working on concrete plans to deal with these huge losses and their repercussions.

This news – almost regardless of any words of qualification that emerge this weekend – will have a resounding effect on the febrile markets when they open on Monday.

Unconfirmed reports circulated yesterday that G20 leaders have recognised that the Athens government cannot cope with the scale of its debt burden and that there will eventually need to be a considerable reduction in the face value of Greek debt. The Finance Minister, Evangelos Venizelos, was quoted by two Greek newspapers as suggesting that a 50 per cent writedown for the holders of Greek bonds would be the "best option".


***this will put greater pressure on portugal & ireland. this is gonna be interesting.

[DCBob]

1. This sounds like good news to me..

they are finally coming to a consensus on the need for a restructuring of Greek debt. That should help to stabilize the world markets.

[Eddie Haskell]

2. We'll see

[DCBob]

3. it depends on how well they can isolate the fallout from the restructuring.

if investors believe the contagion is contained then most likely there will be stability.

[BoWanZi]

8. Doubtful, I think there is going to be a massive domino effect. Once Greece falls, more follow.

This will not end well, I look at it as the start of another deeper recession. Hell, we have been in a recession for what now, 3 years?, its just going to continue if this occurs.

[DCBob]

11. perhaps but clearly that is exactly what the negotiators are focusing on to avoid.

a massive domino effect hurts everyone. I think there will be a structured Greek default agreed to by all parties and that should help minimize the possibiity of a worst case scenario.

[unblock]

5. stabilize, yes; but only after a plummet.

[DCBob]

6. unless a partial Greek default has already been priced in by investors..

The biggest fear for investors is the contagion spreading to other EU economies. Hopefully this plan will avert that scenario.

[dixiegrrrrl]

4. Translation: IMF has squeezed the turnip dry, no more blood forthcoming.

Greece gave in to the extortion ...how many times previously....3? 4?

[Hotler]

7. Ssshhhhhhhh! Hear that? Listen.

Can you hear the rumbling in the distance? There is a giant turd about to hit a giant fan. Prepare yourselves my friends. I have no hope. I see no future.

[BoWanZi]

9. Agreed totally. I'm getting scared and I'm just a little nobody with no savings

[FarCenter]

10. The bonds are not a big issue; the big unknown is the Credit Default Swaps

Are these triggered? Who owes what to whom? Are the counterparties good for it?