Don’t be fooled by the IMF’s announcement that Greece will get a new round of money.
This bailout will give the parties a couple of months to seriously negotiate what haircuts and debt extensions investors need to take in Greece, Ireland and Portugal. Virtually all of the comments made by the involved parties support the view that we are now in a phase where people are negotiating how much they will write off and what else they will do. Almost none of the comments indicate that anyone is really trying to put together a plan that is going kick the can down the road for a long time. I am fading this rally as only the most optimistic investor can believe that this problem won’t lead to real default/restructuring with haircuts in the next couple of months.
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