PSI Participation Rate

The PSI continues to be something worth watching, and the confusion around it frankly amazes me.  We don’t know what the pool is, yet that is critical.  Are the March 20th bonds in the pool or not?  That is 7.25 billion swing in total debt, and timing of debt payment.

The IMF is working under the assumption of a 95% participation rate (I assume they have the pool of bonds eligible).  5% would be 10 billion of bonds that don’t participate.  They are really going to pay those out at par?  I would assume the holdouts will be shorter dated bonds, so why pay out 10 billion now, instead of 5 billion in 30 years.  Couldn’t that 5 billion be used to build Greece rather than pay holdouts?

And why only 95% if they are going to use the CAC clause retroactively?  If you have the CAC, shouldn’t you assume a 100% participation rate?  Or maybe they are concerned that a retroactive CAC clause is actually illegal?  Again, there seems a disconnect between participation rated, CAC’s, and the pressure being put on Greece for relatively small further cuts.

The bank bailout side grew by 10 billion since the IMF’s “fifth” review, which I think was only back in November.  But yeah, they have 2020 nailed down.  Comical.

What would be great, is if any of the people currently spouting headlines out of Europe were held to the standard of an American CEO.  There is a reason that not every conference call is ultra optimistic in the US, CEO’s can face problems if they are caught lying – the EU, ECB, and IMF don’t seem to have that as a potential constraint on what they say.