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Espagne...
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Since when is 6% bond yield exceptionally high? Historically it's pretty average and plenty of countries have survived with those kind of interest rates for decades.
When you have large deficits and high debts to refinance at short maturities at that rate then it will be a problem.“I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse0 -
Breaking news - Olli Rehn has said that the EC is prepared to extend Spain's deadline for bringing its budget deficit into line by a year.
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Breaking news - Olli Rehn has said that the EC is prepared to extend Spain's deadline for bringing its budget deficit into line by a year.
I wonder what happens if Spanish people don't want to buy Spanish bonds. Presumably that's a chunk of the Greek bailout that can't be met. Will that, in turn, mean the Greeks can't meet their share of the Spanish bailout?
Maybe the Greeks can use Spanish bonds to pay their workers and vice versa.
This is what I meant by contageon: if the solvent take on the debts of the insolvent then there's a risk both end up bust. I wish I wasn't right but I fear that I am.0 -
I wonder what happens if Spanish people don't want to buy Spanish bonds. Presumably that's a chunk of the Greek bailout that can't be met. Will that, in turn, mean the Greeks can't meet their share of the Spanish bailout?
Maybe the Greeks can use Spanish bonds to pay their workers and vice versa.
This is what I meant by contageon: if the solvent take on the debts of the insolvent then there's a risk both end up bust. I wish I wasn't right but I fear that I am.
I have no idea. I can only imagine that a lot of this is going to end with some massive write-downs for pension/other funds, who seem to be the end holders lots of sovereign debt.0 -
I have no idea. I can only imagine that a lot of this is going to end with some massive write-downs for pension/other funds, who seem to be the end holders lots of sovereign debt.
Don't forget that insurance companies also hold regulated quantities of Government bonds as a large part of their reserves. If your house in Madrid burns down then perhaps the insurance can't pay out.0 -
It seems like it's all coming to a head again.0
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It seems like it's all coming to a head again.
Yup. It also seems that there's a 3rd part to the GFC coming in about 3 years time when CLOs (Collateralised Loan Obligations) become due. That looks set to mug the corporate sector in the way that households and Governments have been done in.
Oh well.0 -
Yup. It also seems that there's a 3rd part to the GFC coming in about 3 years time when CLOs (Collateralised Loan Obligations) become due. That looks set to mug the corporate sector in the way that households and Governments have been done in.
Oh well.
Saw this, which seems rather appropriate!
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This could all be fixed if Germany left and allowed the Euro to devalue massively. The French would probably be the biggest losers though and it looks like Hollande is unwilling to take that given the French record with traitors.
I guess it would be the line of least resistance and a winner IMHO.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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