Why Ukraine Deserves a Haircut

The barber gave him a haircut.

I got a shave and a haircut.

Before taking a journey, I got a haircut.

It is time you had a haircut!

Your uncle gives your aunt a haircut.

Europe s Inevitable Haircut

I want to go and get a haircut.

You can see me, I have the same haircut, in the upper right corner.

In these cases, debt restructurings produced a haircut on exchanged bonds.

They made fun of Jack's haircut.

Panbanisha is trying to give Nyota a haircut with a pair of scissors.

I want to get a haircut before I go on the trip.

Frankly speaking, I don't like your haircut.

I could not help laughing at his haircut.

And you can see why I'm down on style, with a haircut like that.

The size of the haircut tended to be commensurate with the depth of the economic recession before restructuring.

A couple of quick factoids it really took 155 people over two years, and we didn't even talk about 60 hairstyles and an all digital haircut.

And, oh yes, if you wanted, he would give you a haircut short on the sides, long in the back and pull your tooth while he was at it.

Had Greece defaulted on its debt in 2010, imposing the same haircut on private creditors as it has imposed now, it would have reduced the debt to GDP ratio to a more manageable 80 . That would have been painful, but it could have spared the Greeks from a 7 decline in GDP and a rise in unemployment to 22 (including an increase in youth unemployment to a whopping 48 ).

In 2012, as the debt to GDP ratio skyrocketed, Greece s private creditors were given a significant 34 haircut. At the same time, however, new loans worth 63 of GDP were added to Greece s national debt.

Major European banks in the United Kingdom, Germany, and France have, like their 1980 s predecessors, built up a gigantic exposure to what they erroneously thought was safe debt. A substantial immediate haircut on the sovereign debt of the vulnerable eurozone countries would be so destructive that it would set off a new round of bank panics.

After a bank s shareholders are wiped out and its creditors take an 8 haircut, the European Fund transforms itself into a bailout fund, justifying some of Germany s fears. And there is no explicit prohibition of some form of national government bailout.

There was no institutionalized write down of Latin American debt until five years after the crisis, when a haircut no longer threatened banks stability. It was only at this moment that real lending for new projects could really begin.

For starters, in 2001, Argentina unilaterally defaulted on its entire 100 billion debt, an unusual step, rather than negotiating new terms with its creditors. When, in 2005, the government finally got around to negotiating a debt swap, it could almost dictate the terms a 70 haircut.

By the time the eurozone governments intervened decisively, most French and German banks had largely unloaded their holdings at a loss to hedge funds and other investors with a greater appetite for risk. Whatever debt they had held onto lost more than half its value in the haircut.

For instance, a substantial share of the loans given to Greece until early 2012 was indeed used to pay off maturing debt. But it is likely that the holders of the debt were no longer French or German banks who for the most part would have been unable to bear the uncertainty that preceded the 2012 bailout and haircut on Greek debt.

The Franco German initiative unveiled at Deauville in early November, which would require some possible measure of restructuring for debt issued after 2013, tried to avoid the immediate shock of a haircut. But the pre announcement of possible write downs still led to a major wave of uncertainty about banks.

NEW YORK Nothing illustrates better the political crosscurrents, special interests, and shortsighted economics now at play in Europe than the debate over the restructuring of Greece s sovereign debt. Germany insists on a deep restructuring at least a 50 haircut for bondholders whereas the European Central Bank insists that any debt restructuring must be voluntary.

Meanwhile, private creditors, anxious to avoid a haircut, will often postpone resolution in the hope that the situation will turn around. When the problem is finally acknowledged, it is usually already an emergency, and rescue efforts all too often focus on propping up irresponsible lenders rather than on facilitating economic recovery.

First, the court ruled for the first time that a country cannot continue to pay those creditors who accepted a big reduction (or haircut ) on their claims until the holdouts are paid in full. So, why would any future creditor who benefits from an orderly restructuring vote for it if its new claims can be blocked by even a single holdout creditor?

That is why the new deal requires that the government immediately cut pensions, hike taxes (beginning with the value added tax), liberalize the labor market, and adhere to severe spending constraints. At the same time, a write down of official debt, like the haircut given to private creditors in 2012, will be necessary.

Thus, in addition to an orderly resolution regime for banks, Europe must also implement early orderly restructurings of distressed sovereigns public debt. Waiting until 2013 to implement these restructurings, as German Chancellor Angela Merkel proposes, will destroy confidence, as it implies a much larger haircut on residual private claims on sovereign borrowers.

The new plan relies on a questionable mix of dubious financial engineering gimmicks and vague promises of modest Asian funding. Even the best part of the plan, the proposed (but not really agreed) 50 haircut for private sector holders of Greek sovereign debt, is not sufficient to stabilize that country s profound debt and growth problems.

In other words, Mrs. Obama is managing to set herself up, unprecedentedly, as the people s First Lady. She has carefully studied not only Jackie Kennedy a comparison obvious from her sheath dresses, boat collars, and page boy haircut but also the triumphs and failures of that other glamorous but underestimated stealth radical, Princess Diana.

Second, if the holdouts are paid in full, the majority of creditors who accepted a haircut can request to be paid in full, too. If that happens, the country s debt burden will surge again, become unsustainable, and force the government in this case Argentina, which is servicing most of its debt to default again on all creditors.

As the final rate of participation was about 76 per cent (implying that about 62 billion was tendered for exchanges), the second scenario was retained.23 The haircut on discounted bonds was equivalent to 66.3 per cent, which was the highest ever reached in recent times.

Most of the sovereign debt is now held by the official sector, which traditionally does not allow any haircut. The remainder has been reissued under English, not Greek, law, putting it outside of the control of the Greek government and its new collective action clause, which facilities partial defaults.

Finally, imagine the effect of all of this on Greece s financial, fiscal, and social security ecosystem With bank shares skyrocketing, our state s losses from their recapitalization would be extinguished as its equity in them appreciates. Meanwhile, the development bank s dividends would be channeled into the long suffering pension funds, which were abruptly de capitalized in 2012 (owing to the haircut on their holdings of Greek government bonds).

You have a genotype and you have to have a phenotype.

And you have to have a bumper sticker, you know. You have to have a statement.

Have a stick? Well why not have a carrot?

And we have a I have a little something here.

We have to have a plan.

They don't have to have minds to have a plan.