Nouriel Roubini at Davos has announced in none too uncertain terms how he feels about Greece right now -- it's a lost cause that Europeans will be forced to back-stop.
“Greece is bankrupt,” Roubini told CNBC.com at WEF. “Look, they have to ask China to help them out.”
If the situation becomes dire enough the European Union will be forced to help bail Greece out because it’s such a threat to the monetary union, he said.
Now the question is whether or not Greek bonds are a good buy, given that Europe might come in and support the nation's finances. It all depends on how exactly any bailout were structured, ie. how much pain bondholders are made to feel.
Given that many European nations fear losses on Greek bonds for their own banks, perhaps bondholders will be given a free-pass and investors might be able to thus free-ride the Greece bailout via high-yielding Greek bonds. Just as China might end up doing.
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See Also:
- EU Privately Freaking Out About Greece And The PIIGS Breaking Apart The Union
- RBS: Here's Why Greece Will Ultimately Be Bailed Out By The Europeans
- Bernanke Gets The Roubini Endorsement
Full story at http://feedproxy.google.com/~r/businessinsider/~3/qfSwNZr-gBg/roubini-greece-is-totally-bankrupt-2010-1
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