The Greek Finance Minister will travel to the U.S. in two weeks to drum up support for his latest bond auction that he hopes will raise $10 billion ($13.4 billion).
The market believes quite rightly that his visit to New York and Washington is a roadshow, similar to what a CEO would do in the wake of quarterly earnings or a big deal.
But when does an official visit by a finance minister become a roadshow and should we be viewing the travel of some of George Papaconstantinou's peers in the same light?
Take Tim Geithner's trip to India. With the U.S. bond market preparing for 3,10 and 30 year auctions over the next few days, Geithner arrived in New Delhi knowing that his bid to raise well over a trillion dollars in 2010 on the open market is very dependent on support from countries like India, and of course its big economic rival, China.
Now I know that a visit by the U.S. Treasury Secretary to India is a far bigger deal than a visit by the Greek Finance Minister to New York and Washington.
U.S. interests in India and its future are real, and Geithner should be taken on his word when he says he is in town to discuss trade, investment and financial regulation, but what questions will the Indians be asking of him?
What's Up in the US Bond Market?
Philip Manduca, a hedge fund manager with 20 years experience in the market who runs the strategy team at ECU group, is concerned that someone exited the US bond market 2 weeks ago when demand for a 7-year auction was weaker than expected.
He was frank enough to say he had little idea who it was but believed a major buyer had decided not to take up the new issuance and was worried as a result.
Now this week alone will see the U.S. sell $42 billion worth of Treasurys into a very crowded market. A return to jobs growth and some promising data from the service sector and housing market have improved sentiment towards the US economy.
Geithner and his boss President Barack Obama believe the data shows their support for the U.S. economy at the height of the crisis has paid off and are attempting to sell this message to a skeptical public who believe big government and big spending are not something to be aspired to.
The U.S. Treasury market is one of the most liquid on the planet and any major economy with a current account surplus has no option but to park money in it.
If you end up holding billions of dollars in U.S. Treasurys then selling them can become difficult. As China knows only too well, once you hold the debt you have to support the market or risk a run on the bond market and dollar that would hit the value of your investment.
But if you are India and own just 3.6 percent of China's $889 billion holding of U.S. debt then things are different. Refuse to buy into U.S. bonds and your $32 billion holdings may be worth a bit less but you can get out of the market relatively quietly.
This means if India and others who own less than $100 billion worth of U.S. bonds where to grill Geithner about the health of their investment, he would need to take them seriously.
In Beijing or Riyadh the Treasury Secretary knows his hosts can do little else but buy his paper. Smaller players have more room for maneuver and an official visit by Geithner could very well then turn into a roadshow behind the scenes.
- What You Should Know About This Week's Treasury Auctions