Investors in Greek bonds issued under foreign law rejected the nation’s attempts to restructure the debt at talks last week.
In 20 out of 36 meetings, bondholders either turned down the government’s proposal, adjourned the talks or failed to achieve a quorum, according to a press release today from the Greek Public Debt Management Office.
But but but.... I thought they all got crammed down?
Nope! There are a bunch of these bonds outstanding that were not issued under Greek law (which Greece simply retroactively changed.) These were issued under various foreign laws, mostly UK, and under them there is no provision to be retroactively changed as the UK isn't, obviously, Greece.
The key points here are that should Greece pay in full then the people who held Greek-issue bonds are going to howl after being screwed out of 70% of their money, and if they don't pay then the next question is "what happens next?" Suing a sovereign is always a lot of fun, especially when you have to try to collect in the nation in question should you win.
Let's not forget that on top of this bit of fun we have a Greek election that is sure to compound the games.
In any event those who believe that the Greek situation is "over" have rocks in their head. Not only is it not over, but Ireland is being squeezed:
(Reuters) - The European Central Bank cut Ireland no slack on its push to reschedule payments on 27 billion euros worth of high-interest IOUs, leaving Dublin to lobby other lenders that mounted a rescue to ease the pain of its bailout cost.
The Irish need to tell the banksters to shove it.
What are they going to do about it?
The ECB signalled it could accept no slippage in the repayment schedule, saying in a statement issued on the eve of a weekend meeting of European finance officials that: "It is of utmost importance that the commitments of the Irish state are met in line with standing contracts and agreements.
The Irish need to grow a pair of balls, to be blunt. It's time for these nations and their citizens to make a few points:
- You don't own us. If you don't like the fact that you lent money foolishly, and this means you won't get paid back, that's unfortunate. But it also changes nothing.
- If you try to force us to pay we will force you to leave. Politically and diplomatically if possible, violently if necessary.
Sovereign nations by definition are under the dominion of the people, not the other way around. Foreign "entanglements" such as a foreign central bank or other nation that thinks it has some sort of dominion over the citizens of a sovereign nation, or a private central bank that is in fact not a government instrumentality are nothing other than unsecured creditors.
When an unsecured creditor makes a bad loan and the debtor fails to pay the creditor is stuck with the loss and is forced to eat it.
Any creditor who tries to change this natural order of things, irrespective of who it is, needs to be ejected by whatever means are necessary.
Market discipline requires that foolish lending leads to losses. If you are dumb enough to loan someone money that they cannot repay -- that is, you paid no attention to their capacity on a forward basis to meet their obligations -- then you deserve to lose your investment.
If you then attempt to engage in extortion of a nation and her people to obtain payment the proper response is literally "off with their heads!"
