@ZEPHYRA I think the reason the Greek debt gets picked on, more than most other places, is the risk of default.
(That, and the fact the Greek economy makes an easy joke these days…people have heard about it. Who knows anything about Denmark’s debt? – not nobody but rather few do.)
In recent years Greece has collected only a fraction of the taxes owed due to under-resourced enforcement.(compare the reputation of Greek debt to that of the instrument considerred closest to risk-free: U.S. debt. U.S. debt has a great reputation not because we have a lot of guns but because the U.S. collects its taxes at a world-class rate and it will pay its debt.)
That burden for the government cash flow is compounded by having to fund more than normal amounts of social services on less revenue because the economy is gutted right now and everyone needs help.
That boils down to a lot of scenarios where the government can decide to default if it comes down to funding food stamps and hospitals vs funding interest paid to non-sentient foreign financial entities. Defaulting almost certainly will make it difficult for any Greek interest to float bonds on the international markets in the future – which is a real handicap for an economy trying to rebuild itself – and it will be at a higher interest rate to compensate for the risk.
So, sure, with some spare investment dough – that would not hurt me if it disappeared – it could pan out to buy distressed and discounted Greek debt.
The analysis would be the same as done on other kinds of distresses securities or properties… does the house have good bones? Is the business model solid? Are there reasons to think that obstacles to prosperity can be fixed with known methods?