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talljasperman's avatar

Would you buy Greece debt?

Asked by talljasperman (21858points) February 16th, 2015

If only to have a chance of repossessing the parthenon? Or having an insanely high rate of return with high risk?

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8 Answers

ZEPHYRA's avatar

Not really answering the question, but if you take a look, you will see that Denmark’s debt is tops! Other countries owe a lot more, I don’t see why poor Greece is picked on so much!

Adirondackwannabe's avatar

So let me know how you plan to repossess the Parthenon? Or the Hanging Gardens of Babylon?

talljasperman's avatar

~ Sell tickets…sorry I’m on my smartphone. Or move it brick by brick to Germany. Or you can sell the individual nick nacks to tourists. Or we can put advertising on the sites. Socrates loves coke. Of course I am joking… Greece will be fine.

Adirondackwannabe's avatar

No guy, you can’t move archives out of there native birthplace. They need to be there for the relevance.

ucme's avatar

Don’t listen to that crap @talljasperman
London Bridge was bought & transported brick by brick, then rebuilt in America.
New York, Paris & London each have a Cleopatra’s Needle, giant obelisks originally built & erected in Egypt.
It can & has been done…so there :P

rojo's avatar

No, not me.

I am interested to see how this plays out though. Kinda hope they buck up and send the IMF and ECB and other debt owners into an apoplectic fit. It is obvious that the present arrangement is not helping resolve the difficulties Greece is experiencing so why keep on trying to make it work? Isn’t that one of the definitive traits of insanity?

Time to try something different.

Paul Krugmans take on it

rojo's avatar

From a comment on the above article:

Considering Iceland and Ireland ”....both countries responded differently: Ireland chose to accept a public bailout so that it can be a middle man to secretly bailout credit banks in Germany and France. Iceland chose not to be a middleman, letting its banks collapse so that it can wipe out foreign creditors in the Netherlands and the UK. The latter two countries threatened to exert influence against Iceland in EU institutions force it to bailout their creditors. But, with a bit of luck (and it is own currency), Iceland’s macroeconomic picture looks a lot brighter than Ireland who continues to be a middleman taking public bailouts and a blow to its reputation so it can bailout banks in France and Germany, while the latter continues to lecture moralistically.”

dabbler's avatar

@ZEPHYRA I think the reason the Greek debt gets picked on, more than most other places, is the risk of default.
(That, and the fact the Greek economy makes an easy joke these days…people have heard about it. Who knows anything about Denmark’s debt? – not nobody but rather few do.)

In recent years Greece has collected only a fraction of the taxes owed due to under-resourced enforcement.(compare the reputation of Greek debt to that of the instrument considerred closest to risk-free: U.S. debt. U.S. debt has a great reputation not because we have a lot of guns but because the U.S. collects its taxes at a world-class rate and it will pay its debt.)
That burden for the government cash flow is compounded by having to fund more than normal amounts of social services on less revenue because the economy is gutted right now and everyone needs help.

That boils down to a lot of scenarios where the government can decide to default if it comes down to funding food stamps and hospitals vs funding interest paid to non-sentient foreign financial entities. Defaulting almost certainly will make it difficult for any Greek interest to float bonds on the international markets in the future – which is a real handicap for an economy trying to rebuild itself – and it will be at a higher interest rate to compensate for the risk.

So, sure, with some spare investment dough – that would not hurt me if it disappeared – it could pan out to buy distressed and discounted Greek debt.
The analysis would be the same as done on other kinds of distresses securities or properties… does the house have good bones? Is the business model solid? Are there reasons to think that obstacles to prosperity can be fixed with known methods?

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