It’s rare that you’ll see a chart like this for government debt, so thought I would post a screen cap:
The market thinks that Greek bondholders will take more than a 50% haircut.
Agreed – the trend in this whole saga is that any time a number is mentioned, you almost know it’s going to end up being bigger.
Ok – so walk me through the math here – if I buy a $100 bond November 1st, it’s supposed to pay me $192 over the year and then return my capital next November. Right? Even if yield is cut in half ($96) and the value of the bond itself is cut in half ($50) – I’d still have $146 next November – which is a 50% gain.
What’s so bad about that?
Feel free to explain this to me like I’m a six-year-old.
Hi Steve, answered it here: http://wheredoesallmymoneygo.com/1-year-greek-bonds-now-over-200-and-is-that-a-good-deal/
Thanks for the explanation Preet!
what is the name of your business and how can i contact you to get some help in financial planning. i am thinking of retiring next year, 68 years old.
Hi Harjinder, I do not advise clients any more (gave up my license in 2008). Where do you live? I might know a good planner in your area…
[…] Preet Banerjee informed us about some crazy yield, as in over 190%, for Greek bonds. […]