Roubini: Greece Is Bankrupt
“Greece is bankrupt,” Nouriel Roubini told CNBC.com at WEF. “Look, they have to ask China to help them out.”
Greece is trying to get China to buy 25 billion euros ($35 billion) in bonds, according to published reports Wednesday.
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, Roubini said.
Note what Roubini is saying in this last comment: the EU will bailout Greece. This is not the impression EU leaders have been giving publicly. As the most wired in economist in the world is Roubini hearing things on background that the public isn't, specifically, if things come down to bankruptcy, the EU will bailout Greece?
It's a ballsy trade, but do you buy Greek debt if bankruptcy is near on the bet that the EU will bail Greece out?
Posted by Robert Wenzel at 8:28 AM
3 Comments
3 Comments:
Wenzel,
If the EU does bailout Greece, this sets up an epic moral hazard play. Not to mention the fact that it would completely undermine the entire rationale and strategy for fiscal austerity behind the guidelines for EU membership.
I wonder if Turkey, seeing its own financial situation deteriorating, now steps up attempts to make it into the EU, hopefully just in time for a massive ECB bailout?
If by "ballsy" you mean stupid I agree. Unless you are a true insider this trade is for chumps. By insider I mean like JMK when he made his money by trading British bonds while working for their treasury dept.
I had a bit of fun with Roubini, Rubenstein, & Rajan's financial prognostications at Davos:
http://peureport.blogspot.com/2010/01/triple-r-cage-match-at-davos.html
Also, thanks for the Chris Cox info. I gave kudo's to you at the end of my piece:
http://peureport.blogspot.com/2010/01/red-corporacrat-guns-for-ny-house-seat.html
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