Posted on 07/05/2015 7:30:40 AM PDT by Lorianne
For investors around the world looking at Greece, there was but one question Sunday: What is going to happen when the markets open?
On Sunday night, the prime minister, Alexis Tsipras, said in a televised address that Greece’s banks and stock market would be closed on Monday, as Athens tries to avert a financial collapse.
But the question of what happens when the markets do open is particularly acute for the hedge fund investors — including luminaries like David Einhorn and John Paulson — who have collectively poured more than 10 billion euros, or $11 billion, into Greek government bonds, bank stocks and a slew of other investments.
Most of the hedge fund money in Greece is invested in about 30 billion euros of freshly minted Greek government debt securities that emerged from the 2012 restructuring of private sector bonds.
Advertisement Continue reading the main story The largest investors include Japonica Partners in Rhode Island, the French investment funds H20 and Carmignac, and an assortment of other hedge funds like Farallon, Fortress, York Capital, Baupost, Knighthead and Greylock Capital.
A number of hedge funds have also made big bets on Greek banks, despite their thin levels of capital and nonperforming loans of around 50 percent of assets.
(Excerpt) Read more at nytimes.com ...
I feel so sorry for the hedge fund guys.....NOT !!!
Couldn’t happen to a nicer bunch of people.
Greece will repudiate. Soon. Completely. And with that, they’ll get a clean slate. It’ll definitely suck to be them, but if they play it right they’ll be better off in 5 years.
Like betting on Twice a Prince in the 1973 Belmont hoping to win the 17-1 odds.
When I read the headline, I thought “where’s Laurel”?
“Here’s another fine mess you’ve gotten me into”!
the point of a hedge fund is to provide a hedge against something? Sounds like the Greeks defaulting is pretty much a given, so what were they hedging against?
I hope Soros is long Drachmas.
“Socialism is a tool used by megalomaniacs and sociopaths to obtain power. Being that in a free market economy some people will out earn other people politicians use envy, coveting, and class warfare to garner votes from those who are less productive, lazy and or envious of those who are either more productive or smarter or even luckier in life's economic endeavors.
This is why the economic philosophy of Socialism is based on slogans such as “economic justice,” “economic democracy,” “fair share” “share the wealth” plus a plethora of other words to make it look as if somehow the followers of socialism are being cheated out of what should rightfully be theirs. As if all wealth springs from some kind of money tree and the economically successful got to that tree before anyone else and stole what rightfully belonged to others.” (from someone calling themselves Libertarian Jerry)
Why would anyone buy Greek bonds over the 5 years unless they
are idiots.
Maybe they assume that the EU bankers will keep bailing out the bankers and other elite and saying it's a debt the "little folk" have to pay back?
Is it really any different here?
I can only assume these bonds bottomed out a few years back when this all started and then for pennies these guys bought them up thinking that the EU would bail them out and straighten them out before now.
If they had gotten ten cents on the dollar they would have cut a fat hog.
“but if they play it right they’ll be better off in 5 years.”
Yes, maybe so, that is if they throw out the liberal day-dreamers, and go back to work....
I’m sure you are right.
Ok, I just googled it. From last March: "Soros Says Greece Now Lose-Lose Game After Being..." and many similar headlines. That doesn't mean he had a position. Also he could be long and lying. But that is doubtful. Soros would short Greece if he could guarantee Greece's faulure. He would not go long because there would be no way to guarantee a return.
Because of the greater fool theory. In the U.S. the greatest fool, the Fed, has essentially promised to buy your "investment" in U.S. bonds as long as the U.S. economy keeps struggling. Even Greece has greater fools, although there is no greatest fool in their case.
They bet on the government one too many times.
About time they get spanked, should have happened in 2006.
First exit polls show Greeks voting NO on continuing to borrow money from Brussels!!
Money that can never be repaid and will only serve to further impoverish an already destitute country.
Because they assumed the EU institutions had everything under control.
After all, they had just made an example of Cyprus, to show what happens when an EU member misbehaves. Now with a compliant government in control there and the EU bailout/haircut policy deemed to be a “success’” (according to the NY Times), why should the Greek people be so foolish as to elect a defiant, left-wing party like Syriza? Never happen, right?
These hedge funds took a calculated risk, and now it looks like they’re going to lose. They certainly enjoyed the very high yields while they received them.
http://www.tradingeconomics.com/greece/government-bond-yield
At 15% yield, they earn their original investment back in only about 5 years.
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