I think you are making progress, one under god. At least you didn't succumb to the temptation of contradicting anything I said this time, which is definitely a step in the right direction.

So let's go a little deeper.

>>so gettying half back is insane
even more so because the THEOReticat 'loss'
will be made up..in next years recapitalisation..
strabngly the same ammount as the 'haircut'<<

I hear what you say about bad investment decisions.

They did have an excuse, though. The bonds were backed by the government of a European country, one that is a member of the European Union and also part of the Eurozone. Looked at more broadly, sovereign debt is in any event usually at the more secure and trustworthy end of the investment spectrum.

In that context, a bank getting only 50% repaid at the end of the bond's term is a pretty serious event. And in no way can it be described as a "theoretical" loss. It is real, and has to be absorbed into their balance sheet as such.

As for recapitalization, sure, it is necessary to fill the hole left by the defaults. The banks will ask investors to put more money in, in the form of equity - additional share capital. These strengthen the balance sheet in the form of additional cash, which will enable the bank to better withstand any future pain. And in exchange, the new shareholders get to own a slice of the bank.

Have I missed anything?

Excuse the interruption, but I just wanted to thank you Pericles for the ongoing tutorial. When I bother to think about it, the basic mechanics of bond trading is straightforward, but I admit factoring in considerations of time/expectations/yields et cetera and then looking at how things pan out in the real world, lets me muse on how arcane some of the processes and results seem.

As for the situation facing Greece… I sum it up as: did they take out a loan, did they receive the money, did they spend the money, have they repaid the loan, have they renegotiated the loan, are they less worse off than they were? Yes, yes, yes, no, yes, yes!

And they're still complaining? Seems ungrateful. I would love to have only repaid half my mortgage loan. Maybe my mistakes were not borrowing enough and repaying with money I 'owned' rather than with money I 'owed'?

Still, I'm just grateful that general discussion conspiracy threads get informative after Arjay abandons them.

if govt gives 100 billion...[2012]..to the bankers..
its not a haircut..its another bailout..!

this recapitalisation..will only be
by bankers putting on bankfees etc..

but as arjay repeatedly points out
bankers..at the fed can simply create an account..and the money..[in the form of credit]..is created out of thin air..[after a debt is payed..it affectivly disappears..offthe books,..as if it never egsisted..

per's knows this
knows to open a bank is as easy as putting arround 30,000 into the federal reserve account..and lending out the credit..[created from that cash fraction]

we hear that banks need to restore their reserves
back up to 10%...[this in the main is cash in hand..plus the deposit..held in your bankers fed account]..currently they hold betwen 2 and 6 percent of their outstanding lendings..

there is also the actual rental of notes [by the fed..to the bank to be considerd]..if your bank issues any face value note..it costs 7 cents per..to print one note]..that note rental accumulates till the notes get returned back to the fed..[by the issueing bank]

anyhow im sick of explaining things
but bankers dont lend deposited money
but do lend..the extra...abouve their fraction
the fed holds as deposit..[thus fractional reserve lending]

they are lending money that never egsisted..[till the application to borrow[or caqsh in a bond]..went onto the books..the onloy duifference being..a govt bond..is not a unit of exchange..[cant be owned except by the fed]..[so the fed selling them for investerr speculation]

just that is treason
they took the check[bond]..and converted it into debt
before the bankers took over the issuing of money..the govt did it all itself [in house]..for free..

govts being as good as gold..just isnt so [anymore]
now it pays extra on top of what it is forced to lend
and in the case of greece..its 26%..for a ten year bond

to hell with your short term..tbills

im over trying to explain that you
a former banker just treats as a joke

why dont the media explain..it..
cause your explaining it..bit by bit..is like pulling teeth

and im over it

That is funny, one under god.

>>anyhow im sick of explaining things<<

I rather got the impression that I was explaining things to you.

>>govts being as good as gold..just isnt so [anymore]
now it pays extra on top of what it is forced to lend
and in the case of greece..its 26%..for a ten year bond<<

First of all, the government isn't lending. It's borrowing.

Secondly, they are not paying extra. The coupon is fixed when the bond first goes on sale. The yield on the bond changes, after it has been issued, as that bond changes hands in the secondary market.

But there appears to be a greater muddle going on behind the scenes, as it were:

>>a govt bond..is not a unit of exchange..[cant be owned except by the fed]..[so the fed selling them for investerr speculation]<<

A government bond is simply the recording of a loan made, to the government, which has i) a specified repayment date for that loan and ii) a stated interest rate that the government will pay. It can be owned by anybody - hence the secondary market, where they change hands at either a discount or at a premium to their face value.

Some bonds might actually be sold for greater than their face value. This occurs when the coupon is higher than the prevailing interest rate, and the likelihood of eventual repayment is high. For example, if the coupon on a $1m bond is 6%, and the prevailing interest rate is 5%, the bond might change hands for, say, $1.15m, giving a yield around 5.2%.

None of which affects the issuer of the bond. Your "investerr speculation" is nothing more than the normal trading of financial instruments, designed (for the most part) to enable the holder of a portfolio to balance risk and reward.

Your Super Fund does it on your behalf, every day of the week.

>>why dont the media explain..it..
cause your explaining it..bit by bit..is like pulling teeth<<

This might possibly have something to do with the nature of the media you turn to for your information...?

ok heard on abc 24
italy is next
1.8 trillion of debt

300 billion up for renewal
as their ten year bonds are due to be repaid

[not said was how much of the 300 billion will go to bankers..
to repay the intrest only of the last loan..but lets guess most of it]

apparently..the intrest..
[if the bond rate goes up to 7%]
was said to be 70 billion..[just for intrest]

so how much of the 300 billion NEW loan..will be NEW intrest

mate im sick of studying this ccccccrap
i dont want to know

you with your million..to explain billions
mate thats pure spin and destraction

quote real facts//ol mate
real numbers..like those abc quoted on italy
NOT GREECE..just..28 minutes ago

ie the next one to need some haircut/bailout
befiore the big ones france and germany fail
as reported aljesera yestreday

bah
money changers
a pox on their houses
and a jail cell for polititions colluding treason[via odious debt]

I'm sure that we would all prefer that we wake up one morning and find that it has all been a bad dream, one under god.

>>mate im sick of studying this ccccccrap
i dont want to know<<

You are right, Italy is next in the firing line. Its government needs to implement austerity measures, pretty damn quick, to settle the market down. Unfortunately, they are led by a buffoon with other things on his mind:

"The prime minister, who delayed the release of his latest album of love songs because of the euro-region crisis, has been distracted from governing as he faces trial on charges of corruption, fraud and paying for underage sex. He denies any wrongdoing"

http://mobile.bloomberg.com/news/2011-11-07/italy-yield-surge-sets-berlusconi-on-bailout-path-euro-credit?category=%2Fnews%2Fmostread

But stay calm, it's never quite as bad as you believe that it should be, one under god.

>>italy is next
1.8 trillion of debt
300 billion up for renewal
as their ten year bonds are due to be repaid<<

The actual debt amount is not, at this stage, the worrying part. It is the rising interest rate (the coupon, remember?) that will be needed to raise the new money, to replace the old. Interest payments come out of the budget, whose revenue comes from the taxpayer.

Prepare for stuck-pig squealing all across Italy's North.

Incidentally:

>>[not said was how much of the 300 billion will go to bankers..
to repay the intrest only of the last loan..but lets guess most of it]<<

I thought we had already put this to bed.

The 300 billion repays the principal outstanding on the previous ten-year bonds. One lot of bonds matures, you issue another lot to pay them off. All governments do it. Even ours.

As we have discussed before, the money is borrowed by the government, They pay a fixed amount of interest during the term of the bond, and return the principal at maturity.

So of course the $300bn goes to the bankers. They lent the money in the first place.

At least - unlike those who lent to the Greek government - they are getting the full amount back.

Probably.