Bond Holders Getting School'd in Pricing Risks by Dionysus

"Mr. Papademos said that if Greece did not receive 100 percent participation in a program in which bondholders would voluntarily write down $130 billion from Greece’s unwieldy $450 billion debt, the country would consider passing a law to require holdouts to take losses."

"His comments came after talks broke down last week between Greece and its creditors over the terms of a “voluntary” default, in which the private bondholders will agree to a 50 percent reduction or more in the value of their holdings."

http://www.nytimes.com/2012/01/18/world/europe/papademos-says-greece-could-force-creditors-to-take-losses.html?_r=1&hp

"Greece has ratcheted up pressure on hedge funds and other holders of Greek debt ahead of the talks by threatening to consider legislation that forces creditors to take losses if not enough bondholders signed up to the deal.  A law on so-called collective action clauses forcing holdouts to accept losses could be drafted if Greece deems the participation rate unsatisfactory, Greek officials said."

"The debt swap deal would see creditors voluntarily giving up 50 percent of the nominal value of the bonds they hold."

http://www.reuters.com/article/2012/01/18/greece-debt-idUSL6E8CI2TE20120118

I'm not surprised.  This is an overdue lesson about pricing for risk.  Last time I checked, bond fund managers don't usually command armies and legislatures.  Oh wait, I guess they might...or have a brother in law that does...  My thought: hey, get over it.  It's only money, right?  So you take a few losses...so what?  Relax and take it like a man.  You can't really tell me that you thought you were going to jump into the sack with a Greek without being expected to take the high hard one up the shit chute at least once.

Neon Dion - Party Time, Excellent!