Greek haircuts, eurocrat's lies and bi-brain-celled innocents!

Part of a posting from an Acting Man post seems best quoted to end a day where  the signs of imminent collapse appeared on every side, only to be ignored by the professionals employed to report on such events: 

Meanwhile, the Greek debt restructuring talks (the allegedly 'voluntary' reduction in the claims of private sector bondholders by 50% or more) continue to drag on with no end in sight yet. If this debt exchange can not be effected in time, a hard default will become inevitable.

Mind, we happen to believe that Greece should actually allow a hard default to occur unless the public sector lenders also agree to a 'haircut'. Nowhere is the problem of suddenly subordinating unsecured debtors more vividly demonstrated as in the case of Greece. The decision of the eurocracy to create two distinct species of creditors with vastly different rights – the 'troika' of IMF, EU and ECB on the one hand, and private sector lenders to Greece on the other hand -  has contributed greatly to the intensification of the sovereign debt crisis in 2011.

After all, given that the eurocrats have broken every single promise they have made w.r.t. Greece since 2010, their latest promise that the Greek case will definitely remain a 'one off' is no longer believed by anyone calling more than two brain cells his own. This has thoroughly sabotaged the chances of other stricken sovereign debtors to return to the markets for their financing needs.

Allegedly, 'progress has been made' in recent days in the debt exchange talks, but one Spanish hedge fund walked out of the talks a week earlier and so far all reports of 'progress' have turned out to have been hot air. In related news, it has been rumored that 'Germany is studying the imposition of an even bigger haircut on private sector lenders'.

“Germany's government declined to comment on a report that it may push for creditors to accept bigger losses on Greek debt than previously agreed upon, saying only that talks on lowering Greece's debt level may end soon.

Germany is studying a proposal to write down 75 percent of Greek government bonds held by private creditors as part of a planned debt swap to ensure greater debt sustainability, Greek news website Euro2day.gr reported today, without citing anyone.”

 

(emphasis added)

Since the 'troika' will not accept any haircuts on its Greek credit claims, it is obvious that the private sector haircut will do next to nothing to alleviate Greece's debt problem. Hence the constant pushing for even bigger concessions. It evidently hasn't dawned on the eurocrats yet that market participants don't like being played for fools by politicians. They seem not to have realized that with every broken promise they are worsening the situation of the remaining sovereign euro-land debtors.