Ireland/Greek Treasuries
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Clive
Ireland/Greek Treasuries
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Last edited by Clive on Mon Jul 04, 2011 4:39 pm, edited 1 time in total.
Re: Ireland/Greek Treasuries
I'm going to move this to the Variable Portfolio discussion area. I think looking at bondholders in Iceland and the US in govt. bailed out companies were treated would be a good place to start to see how you may fare if things go wrong on the bet.
Re: Ireland/Greek Treasuries
If I were an Irish PP investor, I would own some mix of British and German bonds and I would own a European equity index for the stock portion.Clive wrote: So what might be the PP saviour for the Irish PP investor?
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Ireland/Greek Treasuries
I'm many hundreds of miles (kilometers?) from being a European PP expert but I was under the impression that you should buy long-term bonds denominated in the currency of your home country but not necessarily the bonds issued by your home country.
The issue, to me, is credit risk. The PP says to only buy long bonds that have virtually zero credit risk, so I don't even think Irish bonds are appropriate. Some form of Irish default looks substantially higher than "zero" to me. German bonds seem like the safest bet from where I sit. It's inconceivable (to me, at least) that the ECB would not crank up the printing press to avoid a default of German sovereign debt.
Edit: MT's idea of mixing bonds is probably better.
The issue, to me, is credit risk. The PP says to only buy long bonds that have virtually zero credit risk, so I don't even think Irish bonds are appropriate. Some form of Irish default looks substantially higher than "zero" to me. German bonds seem like the safest bet from where I sit. It's inconceivable (to me, at least) that the ECB would not crank up the printing press to avoid a default of German sovereign debt.
Edit: MT's idea of mixing bonds is probably better.