From Financial Warfare to Financial Lunacy in Hellas – Greek 2-year bond yield 45%!!!!!

By Nick Skrekas

Can anybody else see the insanity in this supposedly efficient market reality? The interest rate on a 2 year Hellenic state bond on financial markets on Thursday (Aug. 25) hit an astronomic 45%!

Yes, this means you loan money to Hellas for two years and your return will be a interest rate of 45% – I am not kidding.

Talk about a “usurious” interest rate for the Hellenic Republic and Greek tax payer. Would be illegal in the Middle Ages.

Now I could explain for hours how these interests rates are notional; and its a very thinly traded market with knee jerk reactions, and very prone to panic.

I could also underline that the Hellenic (Greek) state doesn’t have to borrow from international bond markets for many years so such yields/interest rate levels aren’t going to impact real budgets or local fiscal needs any time soon.

Therefore, no one should take the media scare mongering about the sky falling down as fact.

But the fear gripped investors that trade our securities at these elevated levels is over-hyped.

They must be living on another planet.

Follow the simple logic because financial markets are behaving in a lunatic fashion …

I, like many other ordinary people who live in Athens and the rest of Hellas (Greece), pay an interest rate of less than 6% on my home mortgage over a 25-30 year period….

But it’s entirely consistent and normal to charge the Hellenic Republic (Greece) 45% for 2 years?

Market’s conclusion: I, and many other ordinary citizens here, must be far richer and more powerful than the whole Hellenic state …

I must check my bank account again because last time I looked I didn’t make EURO 260 Billion a year (Greek annual GDP).

Nor do I remember being told by a private banker that I have assets worth many Trillions of Euro like the Hellenic state. Now do I own, say the Aegean Sea or the Chalkidiki gold mines, and have forgetten about that too?

Something really ridiculous and amiss is occurring in our bond market …

Professional fund managers and large investors have lost the plot because there is nothing rational or sensible in this zany bond trading mayhem …

All thoughts welcomed.

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