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to be fair, there has been talk of getting CDC and KfW to support the bond auction if needed. These are however not commercial or investment bank, even less pension funds or individuals. And as you know the auction was oversubscribed anyway.
by jayjay (jeremy [at] will-hier-weg.de) on Fri Mar 12th, 2010 at 05:51:44 AM EST
[ Parent ]
the auction was oversubscribed anyway

Which means Greek debt wasn't as much of a problem as the business press would have had us believe?

Or that the romour-mongers had successfully lowered the price of Greek bonds while at the same time coercing the politicians to more or less commit to helping Greece, so that speculators could take part in the auction at a substantial discount, hence the oversubscription?

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Fri Mar 12th, 2010 at 06:03:04 AM EST
[ Parent ]
Oversubscribed three times. But who was buying?
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 12th, 2010 at 09:38:03 AM EST
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It was oversubscribed but I would point out two things.

One, lots of American banks and hedge funds were trying to get in on the action so we can't assume that it was German or French banks/gov't institutions that were buying (although if they were they would be making a handsome profit on the interest payments).

Two, the interest is exorbitantly high and that's why Johnson thinks it is unsustainable for Greece, so the real key is, who buys when the interest rates drop--as they must?

by Upstate NY on Fri Mar 12th, 2010 at 10:04:30 AM EST
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I quite agree, there's certainly been talk of those two institutions -- as you say, they are not pension funds or private individuals. The talk seems to get stronger today, as an article in the Austrian paper Kurier claims to have leaks on a plan steered by Merkel and Sarkozy to be able to back Greece with €55bn, €20bn from Germany, half guarantee, half KfW, and €10bn from France, with other EZ countries that are able making up the rest.

Also see this from a couple of weeks ago, where it's suggested that Euro system central banks hold the major part of Greek bonds.

 

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Mar 12th, 2010 at 09:33:11 AM EST
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€55bn or approx. what Greece needs to raise this year, so it could make sense. The recent auction of €8 Bn at 6% just buys them time really.
by jayjay (jeremy [at] will-hier-weg.de) on Fri Mar 12th, 2010 at 10:50:29 AM EST
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