Greece shocks markets with referendum on austerity

[Gups]

Don't disagree with any of your analysis so our difference must be semantic. For me a default means a failure to pay a sum of money one is contractually obliged to pay. If you boorow money from someone else to meet your obligations you haven't defaulted. If the lender varies his contract with you, you haven't defaulted. 

In non-semantic news, the referendum has been cancelled.

[Valmy]

In non-semantic news, the referendum has been cancelled.

Nika?

[Gups]

que?

[Valmy]

que?

I greeted the news of the last rumor of referendum cancellation with an emphatic Nika, similar to how the Greeks of old once saluted a victorious charioteer before starting bloody revolts against Byzantine Emperors, but with this second one my Nika is more guarded.

[Sheilbh]

I was talking about sovereigns.  Argentina settled a year back or so, a good long time after it's most recent default.

I think they offered a 90% haircut and over the past few years the majority of investors have accepted it as better than nothing.  There's still a few hold-outs, for a long-time there were a lot more.

I have a suspicion, but no proof, that investors in Russian ruble debt lost everything.  The difference is where the bonds are issued and what law governs them.  The majority of Latin American dollar denominated debt (which I'm most familiar with) is governed by New York law.  This is important because under NY law any unpaid creditors can seize any new loan disbursements as partial repayment.  So the sovereign is shut out of the market until they settle.

I'm not sure but my understanding was that all talk of Greek default has been based on the assumption that they'll be shut out of the market.

[Jacob]

I greeted the news of the last rumor of referendum cancellation with an emphatic Nika, similar to how the Greeks of old once saluted a victorious charioteer before starting bloody revolts against Byzantine Emperors, but with this second one my Nika is more guarded.

It's so obvious when you put it like that.

[Valmy]

It's so obvious when you put it like that.

It just seemed more fun than just saying 'oh good the referendum is cancelled'

I thought I was on a board with history nerds for godsake.

[Martinus]

Funny-ass day: Greek politics are in absolute chaos, the government has lost it's majority, which causes world markets to... rocket up high, in hopes that this will somehow cancel the referendum and makes accepting the deal easier.

Maybe we should just accept the fact that markets are volatile, irrational and unpredictable. Recently, comments from market "experts" resemble ramblings of Roman augurs reading haruspices.

[Malthus]

Funny-ass day: Greek politics are in absolute chaos, the government has lost it's majority, which causes world markets to... rocket up high, in hopes that this will somehow cancel the referendum and makes accepting the deal easier.

Maybe we should just accept the fact that markets are volatile, irrational and unpredictable. Recently, comments from market "experts" resemble ramblings of Roman augurs reading haruspices.

I vote we use some Eurocrats for entrail-reading purposes in this crisis ... 

[Valmy]

I vote we use some Eurocrats for entrail-reading purposes in this crisis ... 

Or observe how many eagles pass over Brussels.

[Admiral Yi]

I'm not sure but my understanding was that all talk of Greek default has been based on the assumption that they'll be shut out of the market.

There's a difference between being shut out of the market because any new loans get seized by creditors and being shut out because no one is willing to lend you money at any concievable interest rate.

[Gups]

que?

I greeted the news of the last rumor of referendum cancellation with an emphatic Nika, similar to how the Greeks of old once saluted a victorious charioteer before starting bloody revolts against Byzantine Emperors, but with this second one my Nika is more guarded.

You young people and your internet slang.

[Sheilbh]

Maybe we should just accept the fact that markets are volatile, irrational and unpredictable. Recently, comments from market "experts" resemble ramblings of Roman augurs reading haruspices.

Yeah.  I was watching the news last night.  They had one head of a hedge fund on saying the Euro was going to collapse, it was unsustainable, Greece needed to default.  Then they had the head of HSBC's ForEx trading saying the Euro wasn't going to collapse, bit more volatile than recently but will be okay, Greece may default and that the other guy shouldn't be invited on to talk about what he doesn't understand.

It made the wonderful Greek Communist MP a real relief.  As well as flirting with Jon Snow and calling him 'my dear' she described the referendum as a choice betwee 'would you like to die or do you want us to kill you?'  All in an extraordinary Arianna Huffington accent

[Valmy]

You young people and your internet slang.

[Martinus]

Don't disagree with any of your analysis so our difference must be semantic. For me a default means a failure to pay a sum of money one is contractually obliged to pay. If you boorow money from someone else to meet your obligations you haven't defaulted. If the lender varies his contract with you, you haven't defaulted. 

I'm leaning on AR's side on this.

Greece is insolvent. If Greece was a private debtor, it would have defaulted, since it would have been forced by law to apply to a court to declare bankruptcy the moment it went insolvent. That would have been followed by some form of composition proceedings where it would probably reach a settlement with its creditors the way Greece has done now.

A private debtor can roll / restructure its debt or agree to have it reduced, the way Greece is doing, without going bankrupt, but usually bankruptcy laws prevent it from doing so without defaulting first, if it becomes insolvent.

So I am leaning on the side that Greece has for all purposes defaulted.