Financial topics

[Higgenbotham]

When the first domino falls, I give it another 2-3 months before the next dominoes fall, and then maybe a couple more months until the big economies start collapsing.

I'd give it about a week in the first instance, and 2-3 months as you say in the second instance, if the first domino falls now.

[Trevor]

Well, we'll have to see what way this unfolds. Still, 2012 is promising to be a very bad year. I might be mistaken, but I really believe Greece will default within a couple months.

Wonder what that will do to the stock market.

[Higgenbotham]

To me, the stock market is the most interesting thing now. Governments have borrowed and allowed fake accounting to support failing companies and give them fake earnings. The stock market is a huge part of the Ponzi. But it's interesting that this has been going on so long now that everyone is conditioned to think it is normal or at least can go on just a little bit longer, including me. I haven't been railing about a fake overvalued stock market lately either.

[Trevor]

Yeah, I wonder what's going to happen to the stock market once there's an actual default. Will the decline be gradual or over a very short period of time, like a large version of Enron? Well, we're about to find out.

[Marc]

I know that this may seem contrarian, especially to those who frequent this board, but I'm beginning to think that there's a good chance that Greece will not default on its sovereign bonds, at least in the short-term. The reason I think this is due to the fear of the banks and sovereign entities who are highly fearful of what the consequences will be of such a default, coupled with the ongoing inability of relevant stakeholders to come to any sort of agreement regarding how much of a financial haircut to inflict (which, as has been tossed around, may need to be in the 85–90 percent range). We may see the ECB, and perhaps even moreso the Fed, doing what they can to provide politically-achievable, heavily-backdoor assistance to try to keep Greece, and Europe (and the world) from financially imploding. —Best regards, Marc

[Trevor]

For all intents and purposes, Greece is in default. The ratings agencies are likely just hesitant to take that final step because they know what it'll mean. Their bondholders are not going to want to lose most of their money. They're holding on by a couple fingernails. When i saw their bond yields reach 142 percent, I never imagined it would climb higher, but somehow, it managed to do so.

It'd be nice if we could get out of this but I just don't see it happening.

[Marc]

For all intents and purposes, Greece is in default. The ratings agencies are likely just hesitant to take that final step because they know what it'll mean. Their bondholders are not going to want to lose most of their money. They're holding on by a couple fingernails. When i saw their bond yields reach 142 percent, I never imagined it would climb higher, but somehow, it managed to do so.

It'd be nice if we could get out of this but I just don't see it happening.

Well, I say there's only one thing left for both of us to do: Let's short-sell day-trade Greek bonds, perhaps in conjuction with some Greek CDS's that we can snag on the cheap...we'll make a killing! —Best regards/Cheers, Marc

[Trevor]

Yeah, if I had any, but at this point, I wouldn't buy any one-month bonds from the Greeks, much less any long-term bonds. They are an absolute basket case, but I bet some people are doing just what you're describing.

[Marc]

Yeah, if I had any, but at this point, I wouldn't buy any one-month bonds from the Greeks, much less any long-term bonds. They are an absolute basket case, but I bet some people are doing just what you're describing.

Yup, it's a Gen-X Nomad thing for some of us: We love kicking ass, and we love risk! (I just likewise need the money to play! ) —Best regards/Cheers again, Marc

[Trevor]

Guess I belong to the wrong generation, then. I suppose you can invest in a Ponzi Scheme as long as you're one of the first ones in.