January 10, 2012
Hedge Funds the Winners if Greek Bailout Arrives
By LANDON THOMAS Jr.
LONDON — Could Greece’s next rescue payout go straight into the pockets of London hedge funds?
Liquidity moves markets!Follow the money. Find the profits!
That, more or less, is the bet that a growing number of investors are making now as they load up on Greek government securities that mature in March — just when Athens is hoping to receive a lifeline of as much as €30 billion, or $38 billion, from the European Union and the International Monetary Fund.
Conditional on Greece making good on its promises to overhaul its economic foundations, this is in many ways a make-or-break payment for an effectively bankrupt Greece. The new prime minister, Lucas D. Papademos, has warned that without it, Greece might well default and have to leave the euro.
With stakes so high, investors are betting that Europe will go the extra mile to keep debt-strained Greece afloat. And if the price to do that means that taxpayer funds end up bolstering the returns of a few hardy speculators — then, as far as they are concerned, all the better.