Wednesday, January 27, 2010

Desperate for cash, Athens hunts for the dumb money

Don't do it Beijing!

The Financial Times is reporting that Greece has tapped Goldman Sachs to sell about 25billion (Euro) of bonds, hopefully to China.

"Greece is wooing China to buy up to €25bn of government bonds, a move that underlines Beijing’s growing financial power, as it struggles to fund soaring public debt ."

And that's just how it will go. Greek and Goldman officials will slobber over the Chinese, telling them what a "powerhouse they are," when in the end they're looking for someone to buy garbage that no one else wants.

The debt might be priced at 6.4% on ten-year notes, only about 3% more yield than US treasuries of the same duration. That, despite the chance of Greece defaulting on its debt being about 15times higher than the US:

Copyright 2010

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