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Let The EU's Risk Juggling Begin - Greece Bund Spreads Tighter As Portugal Risk Jumps By 12%
Never a boring day for Joaquin Almunia. Over the past two weeks, the commissioner has been busy trying to persuade anyone who is willing to listen that not only would Greece not be bailed out, not only would the country somehow reconcile its 140%+ Debt/GDP ratio and record budget deficit in order without a civil war, not only are various €40 billion GGB certificates popping up all over the price irrelevant in the grand scheme of things, but that the EMU is actually a viable concept, long after anyone who does not believe in the tooth fairy realize that it is only a matter of time before fallout in the periphery tears the Union apart. And highlighting the amount of tragicomedy in Europe's "connected vessels" alchemy-risk experiment is the symbiosis among PIIGS risk: indeed, as Greece Bund spreads have tightened by 10 bps to 343 bps, those of Portugal have widened by a much greater proportional level, and are now 15bps wider at 144 bps. Europe is now one big, cracking dam, holding back a toxic surge of mismarked securities, and a scurrying Almunia is using each and every available finger to plug the PIIGS holes. We wish him all the luck in the world.
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Mr. Durden, you have quite the gift of eloquence.
PIIGS being an English pun, see an English fun
http://www.reuters.com/article/oddlyEnoughNews/idUSN1441724120080714
Let's not forget Belgium with the capital of Europe in it Brussels. Their debt is also Balloooooning!
If they would crack, it would be real statement.
Those evil dutch :)
While Belgium is definitely not a healthy nation I don't think it's in the same category as the PIIGS.
The Dutch=The Netherlands, AKA Holland
I hope this translates into cheaper Belgium beer prices. They make the best beer in the world........drool
budweiser?
Duvel.
One of the STUPIDs is getting stupider?
I think Tyler's golden tongue originates with Marla.
Let your imagination run wild, perverts.
:D
-MobBarley
So! Lets talk about the crack in the dam of the good old USA
45 of the 50 states bankrupt! With good old California and NY leading the crowd. This is a good old diversion by Wall Street& Washington.
Belgian s are not Dutch. Kinda strange mix of French Dutch probably some Germans and Gipsies. Any one care to enlighten us more?
went there only once even though its just over the channel. funny lot, they eat their chips (french fries) with mayonais, when i asked for tomato sauce (ketchup) they did'nt have any. havn't been back since.
"Greece Bund Spreads Tighter"
Have you ever glanced at a headline and misread it? Happens all the time to me and I interpret it as a mental Freudian slip. So what does it say about me when what I saw was....
"Greek Bun Spreads Tighter"
I'm not asking and I'm not telling. :>)
It seems that the "hidden" liabilities were various off balance sheet items, including obligations to PPP projects (do they mean the Olympics), swaps (mmh, less said the better) and various debts such as €5.2bn of the public hospitals. Apparently, this was in the books at only €2.2bn, which is interesting as there have been various stories about this, including one in Le Figaro in 2008 which spoke of €4bn of debt. I wonder whether there was a collective blind eye turned, in order to enable Greece to join (sorry Latvia, you're just not "European" enough)
Anyway, if truth be told, these sorts of "hidden" liabilities are incredibly common. As an example, the UK have something like £215bn of commitments to various PFI projects, none of which appear on the balance sheet. We can only guess what sort of swap transactions have been executed over the years (IAS treatment of derivs requires them to be marked to market, but government entities specifically exempted themselves from these rules, so we just don't know). The point is, the level of these debts in Greece, is about on a par with the rest of the developed world. Within local authorities globally lie all sorts of nasties.
The real question is, what do we do about this? Is it time for us to brace ourselves and acknowledge the real size of the debts sitting within our governments? I think the shock might be too great and the politicians certainly prefer to keep them hidden like the crazy first wife in the attic. If the European people were to rise up and demand to know where all the money went and were told it was spent on lavish salaries, housing allowances, travel ccosts, photocopying 100 billion pages of laws that nobody ever bothered to read anyway.
The situation with Greece is fascinating - if the EU ministers demand full disclosure, will they also demand it of other nations? Can we handle the truth?
+1