Trichet Says Bond “Haircuts” Would Reward Short Sellers

A few week ago ECB President, Jean Claude Trichet, torched the short sellers of the Euro and he is now warning Members of the European Parliament (MEPs) that demanding “haircuts” from bondholders in Greece and Ireland would reward the short sellers.

This guy either: 1)  dislikes the short sellers;  2)  has huge exposure to the PIIGS banks and is denial that they can’t pay it all back;  3)  realizes that the European banking system is overly exposed to the PIIGS and cannot yet afford to take haircuts and/or fully reserve their exposure;   4) is buying time before the inevitable haircuts take place to give European banks time to reduce their exporsure; 5) waiting for a more comprehensive agreement and political unity on how to deal with the Eurozone sovereign/bank crisis; and 6) working behind the scenes designing a Greek haircut that will even wow Parisians.     We vote all of the above.

You can read more and listen to the Trichet response by clicking here.

This entry was posted in Credit, Economics, Euro, Monetary Policy, PIIGS, Sovereign Debt, Sovereign Risk and tagged , , . Bookmark the permalink.

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