With the German Bundestag voting this morning to approve the 2nd Greek bailout, you would think that everything would be hunky-dory w/r/t Greek bonds, and traders would be scrambling to pick them up today, right? lolThe Greek 1 year bond yield has surged to a record 821% today, a new all-time high.
Looks like all those who voted last week that the Greek 1-year was likely to break the 1,000% threshold on 2/28 or 2/29 still have pretty decent odds of placing in the money!
Greece Govt Bond 1Year Yield (GGGB1YR)
| Open: | 699.79900 | High: | 821.20500 | Low: | 695.12400 |
|---|
As several readers have requested an explanation of bond price vs. yield, when the yield or rate of bonds goes up, their price or value goes down. Meaning that holders of Greek bonds are losing value or worth to their bonds as the interest rate continues to skyrocket. Fairly simple explanation.
10 comments:
You'd think they wouldn't bother with 5 decimal places after a certain point, no?
Well that is based on the unsure conjecture that, IN FACT, interest payments will be made, is that right? LOL
Maybe this is a kind of commentary;
http://www.denaliguidesummit.blogspot.com/2012/02/maybe-lot-of-reasons-for-this-but-it.html
Bail out aint gonna happen. EU and ECB just buying some time before the Greek implosion...
AC_Doctor
Sheesh...I don't think loan sharks know how to calculate rates this high...
So, if I were to buy a EU 1,000,000 Greek bond today, and wait a year then I'd be able to cash it out for EU 8,212,050 ? That is pure insanity.
@ anonymous 3:56
Interest rates are relative to the chances of ever seeing your investment money again. Not only do you not have a chance in seeing your investment returned, but there is 8.21x100 percent chance you will not see your investment returned.
But... but... Merkel and Sarkozy have a plan??!!
Man, that deer thingie is a popcorn eating mutha F#$cker.
That's the extent of my intellect right now. Sorry, could resist.
Sinking a single dime into Greece right now, for ANY reason is beyond foolish. It would be like rolling a pair of dice and hoping to get 13 !
If it don't hit 1,000% tomorrow (29th) I'm out of the office pool.
2 OZ.
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