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would be for Greece to buy its debt on the secondary markets at current distressed prices.

The current >10% yields simply mean that holders of past bonds sold them for much less than their face value, thus providing the new buyers with a higher yield. That means that past buyers of the bond have already taken losses by selling at less than their official value.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Apr 29th, 2010 at 04:26:48 PM EST
[ Parent ]
Is this really the case?

Are we really talking about bailing out an indirect bet?

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Apr 29th, 2010 at 04:44:12 PM EST
[ Parent ]
Greece needs cash to roll over maturing debt, let alone buy back the rest of it.

Buying the debt in the secondary market is what the ECB should have quietly been doing since February.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Thu Apr 29th, 2010 at 05:09:19 PM EST
[ Parent ]