Greece Recap and Preview – Watch the Deadlines

/in /by

The net/net of Thursday’s news on Greece is that the Greek government has agreed to the troika’s austerity demands.  However, the European financial ministers now say the deal isn’t done, and that there won’t be a formal announcement this week.

The best way to keep an eye on this theatre of the absurd is to look to the deadlines, as we can reasonably guess the various groups will get their act together by then . . .

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So There’s Just One More Thing About Greece

/in /by

Just when you thought it was safe to finally stop paying attention to Athens, we have a pretty important event occurring on Thursday of this week with regards to the Greek bailout.

Thursday is the day that private Greek bond holders have to agree to exchange their current bonds for longer dated bonds with lower interest rates.

This is important for two reasons:  First, unless 66% of the private bond holders agree to the voluntary swap, the entire debt renegotiation is void (and so is the Greek bailout, because the private bond holders are an integral piece to the entire package).  Second, if less than less than 75% of the private debt holders agree to the voluntary swap, that will trigger “Collective Action Causes.”

CAC’s are basically laws passed in the Greek Parliament last week that would force those private bondholders to swap their debt, voluntary or not (it would basically say they aren’t going to pay the old bonds and instead will pay them what the new bonds state) . . .

The above is an excerpt from the Sevens Report. To read the entire article and to receive daily commentary on all major markets and market moving economic and geo-political events, sign up today to request a free 2-week trial of the Sevens Report.