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Who says sovereign bonds need to be risk free anyway? Absolutely! Default, and we'll just charge more next time. Whatever. Move on. The motivation for this ex
by hessenwolf 11y ago
Who says sovereign bonds need to be risk free anyway?
Absolutely! Default, and we'll just charge more next time. Whatever. Move on.
The motivation for this extremely anti-default push has not been clearly enough laid out, methinks. Bonds, government or not, are an investment. You think I am 100% the stocks I bought in a Ukrainian egg farm will not go bust? Hell no. All who invested in Greek government bonds should have done their homework.
- solve 11y agoImagine if we used the word "investments" instead of "loans" for these government bonds. One word change and everyone's perceptions would drastically change.
- laichzeit0 11y agoWell to the layman like myself, bonds and investments sound different. With a bond I expect there to be some security or asset backing it that I could potentially recoup if you default. I don't know like say, Greece loses some it's territory in equal worth to it's debts?
- andrepd 11y agoPrecisely! This sort of mentality that the system has a duty to protect investors from being burned is completely upside-down in my eyes. It's the investors that must take the fall when the entity they invested in goes bust, definitely not the gov'ts at the expense of the taxpayers.
- nisa 11y agoThis was the problem in 2010 and as far as I understood it a lot of e.g. German banks would say: We are done if they default... that's why they shifted the debt to the IMF/European countries.
- paulojreis 11y ago> All who invested in Greek government bonds should have done their homework. In the end and unfortunately, I think we'll have to admit that they did. Nice interest rates and the "whole world" making sure it's paid back.