Rich hedge funds are happy to drive the Greek economy into complete ruin. Greece might never recover from the crisis because there are too many vested interests, like the hedge funds, that are making money stripping Greece to the bone.
The Wall Street Journal reports that bond holders, notably the hedge funds will not enter any deal to save Greece and that will result in a default. "Traders say the higher costs of insuring against a Greek default reflects a growing belief that some bondholders, mainly hedge funds, won't voluntary agree to the deal. Some hedge funds have been purchasing short-term Greek debt, angling to profit from delaying a restructuring agreement and triggering CDS (credit default swap) payments,'' the WSJ says. "Should the hedge funds not sign on to a restructuring, Greece may need to force holdouts into a deal. That turn of events would likely be considered a default under the rules of CDS contracts and trigger a payout of the swaps."
The Independent reports: "There will be a final attempt today – when a group representing Greece's private sector bondholders meets senior ministers in Athens – to negotiate a writedown of the value of the country's debt ahead of a crucial bond repayment deadline next month. Sources familiar with the talks, which collapsed at the end of last week, have said that a number of hedge funds are holding up the restructuring deal to ensure that they make a fat profit, after snapping up Greek bonds at distressed prices."
The problem is that hedge fund greed might tip the world into a Depression. As commentator Ed Pawelec says, a Greek default will have enormous ripple effects. "It doesn't even matter if Greece is forced to leave the Euro or it is allowed to stay — a run on Italian and Spanish sovereign debt is sure to follow. The big money manipulation of the markets is going to cause a serious monetary and economic dislocation that could move Europe rapidly from mild recession to full on depression. The US stock market and economy are not on an insulated island; there will be a deleterious effect on both when the tsunami effect hits these shores."
With hedge funds gaming the system, the outlook for the global economy is bleak.
no comment untill now