Barbers Give Haircuts and opinions at NY Protest
http://online.wsj.com/article/APd05c576c79ef4f26abeac86a362a47da.html'NEW YORK — Some barbers descended on New York's Occupy Wall Street protest — cutting hair while suggesting bankers "take a haircut."
That's a banking term meaning adjusting a loan.
On Monday afternoon, the half dozen barbers set up chairs on Broadway. Each wore a top with the name of a big financial institution.'
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ECB Agrees to Bigger Haircuts on Greek Debt
http://www.businessinsider.com/now-even-the-ecb-is-agreeing-to-bigger-haircuts-on-greek-debt-2011-10'It appears as though even the European Central Bank has acquiesced to the necessity of bigger haircuts on private sector holdings on Greek debt, according to a Greek government source cited by Dow Jones.
This development comes amid speculation that private bondholders will see a voluntary haircut of as much as a 60% on their debt.'
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Europeans Facing More of a 'Haircut' Than Previously Thought
http://seekingalpha.com/article/301369-europeans-facing-more-of-a-haircut-than-preciously-thought'News is leaking out that the “haircuts” on European Sovereign debt are going to be greater than imagined just several weeks ago. “EU looks at 60% haircuts for Greek debt.”
Three months ago European officials agreed to a 21 percent haircut. Then, in the last several weeks, the figure moved to around 50 percent. And, still officials are dawdling.'
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Great Reuters Report on 'Haircuts' to Start U.S. Growth
http://in.reuters.com/article/2011/10/03/idINIndia-59668220111003?feedType=RSS&feedName=globalCoverage2'For those in favour of a radical solution, there are a lot of headwinds.
Any debt reduction initiative must confront the issue of "moral hazard" - the appearance of giving a gift to an unworthy borrower who simply made unwise spending choices.
Institutional investors who own securities backed by pools of mortgages are reluctant to see struggling homeowners get their mortgages reduced because that means those securities are suddenly worth less. Any write-downs that banks are forced to take could imperil their capital levels.
Banks and bondholders, meanwhile, have competing interests. This is because mortgage write-downs depress the value of the securities in which mortgages are pooled and sold to investors. Big institutional investors like BlackRock have long argued that any meaningful principal reduction on a mortgage must also include a willingness by banks to take their own write-downs on any home equity loans, or second liens, taken out by the borrower on the property. The banks continue to hold those second liens on their balance sheets and so far have been reluctant to mark down the value of those loans, even though the borrower often has fallen behind on their primary mortgage payments.'
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