Adjusting My Portfolio for a Forced Renegotiation of Greek Debt
May 26, 2011 at 9:22 AM 
I’ve been following Greece’s economic woes pretty closely since the bottom fell out this year (or something along these lines) and in my opinion, the debt-plagued nation is about to go through a restructuring. There is loads of precedent for it in emerging markets. I went to part of high school in Argentina, my graduate school focus was developing country finance and my first Wall Street job at Chemical Bank (now JPMorgan Chase) was trading emerging market defaulted government debt. Over the course of my adult life I’ve seen the following countries stick it to their lenders.
Argentina (2 negotiated, 1 unilateral),
- Brazil (negotiated),
- Poland (negotiated),
- Venezuela (unilateral sort of),
- Mexico (unilateral internal debt, negotiated external),
- Russia (unilateral then cured).
Seeing a renegotiation of timing or payments by Greece and some sort of guarantee by the EU is not without lots of precedent. It seems all but inevitable. And that said, bond prices have had plenty of time to price in a partial default.
READ ON TO SEE HOW I AM ADJUSTING MY PORTFOLIO