Professional Documents
Culture Documents
• Greece Update – Reuters reported this morning (starting to hit the market at ~4amET) that Greece
will make a formal request to have the IMF/EU rescue package activated (Greece’s Papandreou made
the request at ~5:55amET). The news that an activation request was going to be made is helping to
tighten spreads slightly although the markets are still skeptical. We are still waiting on details on when,
how much, and in what form, assistance will flow to Greece (it still seems like some countries, inc.
Germany, could see internal legal challenges to their pledges of aid). The EU Commission said it has only
just heard of the Greek request this morning and will decide on the release of emergency loans to
Greece after it has determined whether the aid request is valid. It was assumed that when the EU/IMF
officials came to Athens this Wed to discuss the terms of an activation that such a request would be
made and traders are viewing this morning’s announcement as an attempt to tighten spreads back to
more reasonable levels. The markets still have their same concerns: 1) not clear if the IMF/EU rescue
framework will be enough; 2) not clear if Greek populace will tolerate further austerity measures
(judging by the continued strikes); 3) not clear if Greek statistics are even viable (see Thurs morning's
large revision to the prior budget deficit). There have been a lot of articles this week (starting on Tues
morning in the FT) talking about how a Greek debt restructuring of some sort is inevitable.
Greece 5 Year Government Bond Benchmark
Since November, the interest rate Greece pays on its 5 year debt has gone up over 6%. Imagine if your
mortgage did that.
• Goldman execs – more to appear before Senate panel on Tues – initially, just the co’s CEO, L
Blankfein, was expected to testify; then F Tourree was added to the list. The NYT says that both those
men but also at least three other top execs will appear on Tues. The Times notes that the fact Goldman
is willing to send so many employees to the hearing underscores the extent to which it will go to defend
its reputation – Some light is about to be shed on the operations of a very secretive institution.
• Party Affiliation Gap narrowest since 2005