– Greek Bank Bonds & Stocks Crumble To Record Lows (ZeroHedge, Feb 9, 2015):
Just 3 short months ago, Greek bank bonds were trading near par and every over-leveraged, over-confident, over-full-of-propaganda hedge fund was buying them “for the yield” – well, S&P had upgraded Greece and implied ‘all-clear’. Today, Greek bank bonds are trading at 60% of face-value, having dead-cat-bounced last week before re-collapsing today. Greek bank stocks are also careening lower with most at record lows (below the lows reached during the peak of the crisis). The reason to focus on these instruments is that, while somewhat illiquid, they are the most sensitive to the day-to-day headlines and overall sentiment on Greece (and Grexit) as a pure reflection (redenomination risk aside) of trouble ahead
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Of course they are crumbling. Why their debt is traded on Wall Street is beyond me, but I am no financial genius. I think the market ought to stay with industry instead of bad debts, it would be far better off. Greece is leading the way for other debt laden EU members to leave the Euro, and join the Eastern Bloc. The debt laden US no longer offers anything of value, so our friends are friendly no longer. The US has replaced diplomacy with bullying, and offers little else beyond promises they don’t fulfill. The US has lost the most important thing it ever had, credibility.
Greece is just the beginning. If all their debt is on the stock market, the market will suffer as well.
It is time this is stopped. Stop selling MBS, Mortgage Backed Securities, debt, auto loans, credit card debt, and more on Wall Street. It is debt packaged as asset…….the market needs to go back to industry, and stay out of the rest of this trash.