Spains borrowing costs hit 7%

Graham_Devon

Spains borrowing costs have this morning hit 7%.

This is a level many analysts believe is unsustainable, and also a level which prompted bailouts for Ireland and Greece according to analysts.

The recent bailout of £82bn was supposed to aleviate some of these issues, however, investors and rating agencies have stated it simply adds to the countries debt burdens.

Italy will have it's yields tested later today.

http://www.bbc.co.uk/news/business-18438044

On another not, Merkel has today made a speech, which is quite unlike her, and not quite as optimistic as usual, stating Germany does not have all the answers and we should not overestimate Germanys ability to resolve the crisis.

She should of course have been speaking to herself, instead of the rest of us who were telling her this many moons ago!

quantic

Something doesn't add up:

Country - 2011 debt-to-GDP ratio / Ten-year bond yield

Japan - 229.10% / 0.85%
Greece - 152.30% / 29.54%
Ital - 120.30% / 6.12%
U.S. - 99.50% / 1.63%
Belgium - 97.30% / 3.29%
Portuga - 90.60% / 10.72%
France - 85% / 2.67%
Canada - 84.20% / 1.78%
U.K. - 83% / 1.69%
Germany - 80.10% / 1.36%
Spain - 63.90% / 6.68%

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/debt-is-becoming-the-zombie-myth-of-the-euro-crisis/article4255633/

Wookster

Things do seem to be coming to a head.

Generali

Italy paid almost 4% on 1 year BTPs (Government bonds) at the latest auction, up from less than 2.5% a month ago.

The sovereign debt part of the current mess is looking like it's coming to a conclusion.

MacMickster

The markets know what the politicians either can't or won't see - that bailouts in the form of loans to countries with fundamental economic problems merely exacerbate those problems.

The markets will bring about the break up of the Euro despite any efforts of the politicians.

Graham_Devon

Italy has succesfully sold €3bn of bonds at 5.3%.

This is up from 3.9% last month.

worldtraveller

Graham_Devon wrote: »

Italy has succesfully sold €3bn of bonds at 5.3%.

This is up from 3.9% last month.

Shame that they are cross-guaranteeing around 18% of the €100 billion loan to Spain at 3% then! :rotfl:

DannyRadclif

When is it going to become clear that creating more money out of thin air and adding it to the expanding supply hasnt worked before and it still isnt going to work now. But that is the definition of madness keep doing the same thing expecting a different result.

The_White_Horse

how come a stupid 3 yr old can understand that if Spain is straining under the pressure of its debts giving them another 80bn makes that debt worse. and then, a full bailout would make them even worse. then they are still the same, but with huge debts and no chance of growth at all. and where is all this money coming from???

madness.

ILW

quantic wrote: »

Something doesn't add up:

Country - 2011 debt-to-GDP ratio / Ten-year bond yield

Japan - 229.10% / 0.85%
Greece - 152.30% / 29.54%
Ital - 120.30% / 6.12%
U.S. - 99.50% / 1.63%
Belgium - 97.30% / 3.29%
Portuga - 90.60% / 10.72%
France - 85% / 2.67%
Canada - 84.20% / 1.78%
U.K. - 83% / 1.69%
Germany - 80.10% / 1.36%
Spain - 63.90% / 6.68%

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/debt-is-becoming-the-zombie-myth-of-the-euro-crisis/article4255633/

Attitude affects markets.

If a Greek, a Japanese and an Italian asked you to lend them a tenner until next week. Who would you suspect would make the biggest effort to pay you back if thing got sticky?

Some nations are more honourable than others.

pqrdef

ILW wrote: »

If a Greek, a Japanese and an Italian asked you to lend them a tenner until next week. Who would you suspect would make the biggest effort to pay you back if thing got sticky?

Cartoon stereotypes again.