Greek 10-year Trades Through U.S. 10-year Treasury Yield

God, we love efficient markets.  Greece 10-years now trading through the U.S 10-year.

What is the bond market telling us?  Pleaaaazeee…

How much do you wanna bet the analysts, who were saying “Greece is still going to default” after the 2012 bond restructuring are now buyers of the 10-year Greek bond, which was then yielding around 19 percent and now trading through U.S. Treasuries close to 2 percent?  Nothing like retrofitting fundamentals to the price action.

Here is a nugget we posted just after the 2012 Greece bond restructuring.

We do find it interesting, however, to hear some analysts state “Greece is still going to default.”   On what, may we ask?

…The bond exchange allows Greece to effectively buyback and thus retire €141.11  billion or 68.5 percent of its €206 billion bond stock, at 22 cents on the euro.   The remaining 31.5 percent of bonds , or  €64.89 billion,  are exchanged for various bonds with 11-30 year maturities and an annual coupon of 2 percent through 2015 and gradually stepping up thereafter.

…We’ve worked on many of the world’s largest sovereign restructurings and this is one helluva of deal for Greece,  in our opinion.   Now let’s hope the government can continue on the reform path and animal spirits can generate some investor confidence, which will allow the economy to bottom and start to recover.

…At the very least,  assuming this deal closes,  the  “acute”  part of Greece’s sovereign debt crisis where large bond maturities could not be repaid and almost took down Europe and its banking system in the second half of 2011 is over.   – GMM, March 2012

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