Posted on 01/28/2010 2:06:57 PM PST by ScaniaBoy
Germany has triggered a near-panic flight from southern European debt markets by warning that there will be no EU bail-outs, even though it fears the region's economic crisis has turned dangerous and could prove "fatal" for the entire eurozone.
The yield on 10-year Greek bonds blasted upwards by over 40 basis points to 7.15pc in a day of wild trading. Spreads over German Bunds reached almost four percentage points, by far the highest since Greece joined the euro, and close to levels that risk a self-feeding spiral.
Contagion hit Portuguese, Spanish, Irish, and Italian bonds.
George Papandreou, the Greek premier, said in Davos that his country had been singled out as the weak link in a "attack on the eurozone" by speculators and political foes. "We are being targeted, particularly by those with an ulterior motive."
Marc Ostwald, from Monument Securities, said the botched syndication of €8bn (£6.9bn) of Greek debt earlier this week has made matters worse. Many of the investors were "hot money" funds that bought on rumours that China was emerging as a buyer, offering them a chance for quick profit. When the China story was denied by Beijing and Athens, these funds rushed for the exit.
(Excerpt) Read more at telegraph.co.uk ...
More on Spain: Equivalent of one-third of Spanish GDP in Non-performing Loans
German bankers are awesome!
Soros made a couple of billion when he forced the British pound out of the European Monetary System. Bit more tricky here. The Greeks would either default or bring back the drachma.
The EU is so corrupt it can’t even see straight. EU, what a model for the world.
Does this mean it may be worth something again!
Hold on to it. One never knows - it may come in very handy in the not too distant future.
wow! Very timely info!
This is hilarious. Socialism can only exist when there is somebody outside the system paying for it.
When Sweden was rabidly socialist, their arms industry paid for it. And when even that was *never enough*, Olaf Palme decided to nationalize the arms industry, to kill the golden goose. This likely cost Palme his job. But the lesson is that he was willing to destroy his country to preserve his precious socialism.
Right now, Norway has windfall profits from its oil industry, and is spending them on socialism as fast as it can. But as always, socialism demands more and more resources, to provide less and less of whatever it is supposed to provide. And as soon as Norway runs out of oil, there is no other means to support their socialism.
Greece is likewise fully committed to socialism. But Greece is not a wealthy nation. So the only way they can have socialism is if they can fool some other nation’s socialists to subsidize it, at the expense of their own socialism.
But the voracious beast that is socialism has been in the rest of Europe long enough to greedily want all resources for itself, in each country it occupies. And its endless, vampiric hunger will never share with lesser vampires.
Hopefully, before it dies, it will drag the Euro down with it, and leave a lingering air of distrust between European nations, so it will be a very long time before they contemplate a common currency again.
Is this an indication of the bond vigilantes I keep hearing about coming to life? Could this start a domino effect for other European countries and ultimately the US that causes currencies and bond prices to nosedive as bond interest rates start climbing fast? Just trying to understand the potential fallout.
These are interesting times, but interesting interesting ones. Gotta wonder what will happen to Euro-Disney next. Think I’ll make some popcorn.
The euro was always a warmed over duetch mark.
This is just germany flexing its control aspirations.
The socialists thought they could spend more in Greece in order to pad their pockets.
Greece is not the problem, SOCIALISM PERVADING THE EU is the problem.
The autocrats are afraid their jobs are toast.
It’s a diluted deutsch mark - and that was so far highly benefical for the club of Euro Members - how else could (southern) italy, spain and ireland have attracted so many foreign investments ?
Their banks never gave them a prime + loan for foreign investments if it was based on drachme or lira.
It’s to cheap to say that it was all a german power game to conquer the world - it was a succeful attempt to create a working inner european market - but that effect is to small to matter against the corrections now necessary because of the now obvious failure of the rating system.
No matter if it is spanish housing, us american housing or greek housing and enterprises or the irish bubble - there’s nothing that isn’t linked somehow to the bizar and (I guess) corrupt system of credit rating.
It was a chain mail seeingly supported by many politicians of all nations (e.g. George W. presidential policy of ‘ownership’ for example) bankers and other players.
The greek btw. don’t have a working state - since hundreds of years they struggle to get by on massive corruption. What you see and hear is no change in economics - it’s just looking at e.g. greece through clean glasses again.
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