Who's next? Spain? Italy?

worldtraveller

competitionscafe

The eurozone has sunk into recession, according to PMI data. Now what?
"As we found out on Friday, the final release of the Purchasing Managers Index (PMI) data for the eurozone provided a clear indication that the eurozone is entering recession. A PMI composite reading of 46.5 equates roughly to a quarterly GDP reading of -0.7 per cent, or an annualised GDP rate of -2.5 to -3 per cent. Looking at the country breakdown, the weakest PMI numbers by far were seen in the large highly systemic economies of Spain, Italy and France."
From: http://www.moneyobserver.com/node/4412 November 7, 2011

Thrugelmir

competitionscafe wrote: »

"As we found out on Friday, the final release of the Purchasing Managers Index (PMI) data for the eurozone provided a clear indication that the eurozone is entering recession. A PMI composite reading of 46.5 equates roughly to a quarterly GDP reading of -0.7 per cent, or an annualised GDP rate of -2.5 to -3 per cent. Looking at the country breakdown, the weakest PMI numbers by far were seen in the large highly systemic economies of Spain, Italy and France."

Where's growth going to come from? Not possible to deleverage and grow concurrently. Structural reform in Europe as a whole moves closer every day. .

worldtraveller

The investor exodus from Italian bonds, sparked by the dual political crises in Italy and Greece, raises the most dangerous scenario yet in the euro zone's two-year-old debt crisis.

Yields on 10-year Italian bonds rose to 7.12% Wednesday, a high for the euro era, in the latest sign that investors are fast losing faith in the world's third-biggest sovereign-bond market. Yields might have risen far higher in the past week but for heavy bond-buying by the European Central Bank, economists say.

The latest surge in Italy's funding costs on Wednesday came after clearing house LCH.Clearnet raised margin calls on Italian bonds, making them more expensive to trade. Portugal and Ireland were forced to seek financial bailouts after their bond yields exceeded 7%, a level many market analysts consider unsustainable.

WSJ

Currently the bond rates are at 7.43%.

StevieJ

How weird I clicked this thread and read the first post and it seemed pretty current when in fact it is heading for 2 years old, we have not come very far have we :eek:

worldtraveller

Merkel said Europe's plight was now so "unpleasant" that deep structural reforms were needed quickly, warning the rest of the world would not wait. "That will mean more Europe, not less Europe," she told a conference in Berlin.

She called for changes in EU treaties after French President Nicolas Sarkozy advocated a two-speed Europe in which euro zone countries accelerate and deepen integration while an expanding group outside the currency bloc stayed more loosely connected -- a signal that some members may have to quit the euro if the entire structure is not to crumble.

"It is time for a breakthrough to a new Europe," Merkel said. "A community that says, regardless of what happens in the rest of the world, that it can never again change its ground rules, that community simply can't survive."

Reuters

Treaty changes? A new Europe - more, not less? I have this feeling that we will see some major action in the next few weeks. Will the EU delay any policy changes, yet again IMHO, to a critical point, when there is no other option and we all end up being hoodwinked into a situation that we don't want? "You will have to do this NOW, otherwise the system will collapse!" Will the UK electorate get the promised referendum over any treaty changes?

A lot of questions! Who knows the answers? :think:

However, I'm pretty sure now that there will now be some major changes, very soon, that will affect us all for a long, long, time.

As for the UK taxpayer? I think we are all screwed, as I've said many times before. We will inevitably be a major backstop to all of this! If not through anything else, the IMF, at the very least.

France is now maybe the next country to watch? If French spreads and yields start rising in a similar way to Italy, then watch out! Well, watch out a bit more than now anyway! :rotfl:

The_White_Horse

zis time ve vill succeed...

worldtraveller

worldtraveller wrote: »

France is now maybe the next country to watch? If French spreads and yields start rising in a similar way to Italy, then watch out! Well, watch out a bit more than now anyway! :rotfl:

The cost of insuring against default on French government debt rose to a record on concern Europe's leaders are failing to contain the region’s deficit crisis.

Credit-default swaps on France rose eight basis points to 204, according to CMA prices at 12 p.m. in London, surpassing the record closing price of 202 set Sept. 22.

Bloomberg

tomterm8

worldtraveller wrote: »

The cost of insuring against default on French government debt rose to a record on concern Europe's leaders are failing to contain the region’s deficit crisis.

Credit-default swaps on France rose eight basis points to 204, according to CMA prices at 12 p.m. in London, surpassing the record closing price of 202 set Sept. 22.

Bloomberg

A large part of that is fat finger syndrome.

S&P sent an automated message that France was being downgraded... only, it didn't mean to, gov, it was just a fat finger.

que french ten year bonds widening, and credit default swaps widening.

Good one, S&P.

worldtraveller

World stocks fell from a 5-1/2 month high on Friday as gains spurred by the Federal Reserve's pledge of low interest rates gave way to concerns about Portugal, seen as the next domino in the euro zone crisis, and uncertainty over Greek debt talks.

Portuguese five- and 10-year government bond yields were set to remain under pressure after hitting euro-era highs on Thursday as fears grow that the country may follow Greece in requiring another bailout or seeking to restructure its debt.

Reuters

:rotfl: :wall:

If you didn't laugh, you'd cry!