10:19 PMOf interest is that the 50% haircut is only for privately held Greek paper - i.e. it does not apply to ECB and IMF holdings. Anticipating such a scenario 2 weeks ago, UBS went through the numbers and found the net effect to Greece as being a 22% reduction in debt - better than a kick in the teeth, but likely not enough relief for the nation to be able to pay its bills. [Global & FX, Financials]5 Comments
10:10 PMSpeaking at the press conference, Sarkozy says the IMF (i.e. U.S., maybe China too) will partner with the EU to provide additional bailout funds. He believes the EFSF can be leveraged to provide €1T in firepower without threatening any EU core credit ratings. Under the plan, Greek debt/GDP would fall to 120% by 2020. None of this is new information, all having been leaked out during past days. [Global & FX]4 Comments
10:06 PMRisk assets are on the move higher on word of the deal for a Greek bond haircut. Euro +0.5% at $1.3976. Hong Kong +1.4%. S&P 500 futures +0.9%, German DAX futures +0.7%. [Global & FX,On the Move]Comment!