These new Greek bonds, to be issued Monday, are already trading a trashed out prices. The Bloomberg price shows pricing AFTER the 53% haircut. Another 3/4 has been shaved off. In other words, based on the old bonds the new bonds have lost over 85% of their value. This suggests investors have strong doubts about Greece’s creditworthiness even after its restructuring. Fitch Ratings said on Friday that it would probably give Greece’s new bonds a low, junk-bond rating. Further, as Mark Grant points out, Greece has another 107 billion in contingent liabilities covered by the Greek government.
source: John Mauldin
The bottom line going forward is that no economy can service a still large amount of debt when only 36.1% of its people contribute by being employed. By comparison, the US employment/population ratio is 58.6%, down from 64.7% in 2000. The Greek “cash deficit” at the end of 2011 hit €24.9 billion, or 11.5% of GDP, far above the general budget deficit. Government-owned enterprises, such as the public healthcare sector, can’t pay their bills and the total owed their suppliers was €5.73 billion.