the abyss of promises unfulfilled
the bond market understands that there will be more supply for whatever reason. the narrative is that banks need to be recapped ($32 billion on $207 billion non performers, $190 billion with the public sector banks) and in theory the government borrows to fund.
the reality is the very same banks that require the recap will fund the government borrowing by buying the bonds under their statutory requirement to do so converting deposits into equity using the government as a happenstance conduit.
nothing changes other than the financial ledgermain of converting debt to equity in a zero sum (less fees) exercise.
these cosmetics along with bankruptcy legislation are designed to induce foreign funds to belly up to the bar with domestic bartenders bidding for non cash generating assets at prices that the locals would never consider.
the next buyer is being cheered along by a barron opining that acquisition and conversion of these assets are the opportunity of the generation despite the judicial unenforceablity of local contracts under the constitutional rubric of natural justice.
nevertheless that jumps to the conclusion 7 years hence in the life of funds locked in today to chase the headline.
the bond market understands that there will be more supply for whatever reason. the narrative is that banks need to be recapped ($32 billion on $207 billion non performers, $190 billion with the public sector banks) and in theory the government borrows to fund.
the reality is the very same banks that require the recap will fund the government borrowing by buying the bonds under their statutory requirement to do so converting deposits into equity using the government as a happenstance conduit.
nothing changes other than the financial ledgermain of converting debt to equity in a zero sum (less fees) exercise.
these cosmetics along with bankruptcy legislation are designed to induce foreign funds to belly up to the bar with domestic bartenders bidding for non cash generating assets at prices that the locals would never consider.
the next buyer is being cheered along by a barron opining that acquisition and conversion of these assets are the opportunity of the generation despite the judicial unenforceablity of local contracts under the constitutional rubric of natural justice.
nevertheless that jumps to the conclusion 7 years hence in the life of funds locked in today to chase the headline.
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