All Entries Tagged With: "sovereigndebt"
Euro Flash Crash – Market Correlation Lives On
Early on Wednesday, U.S. futures traded higher. The results of an Italian debt auction came in better than expected, and may have lifted the hopes of traders. Then, right around 10am ET, the EUR/USD pair began to crash—significantly. The pair moved down roughly 0.60% in about 10 minutes, which is a huge move for a [...]
Greece: The Next Argentina?
About 10 years ago it appeared that Argentina was about to collapse under the combined weight of runaway inflation and unmanageable public debt. Capital was fleeing the country at near-supersonic speed as the government stubbornly maintained its fixed peg to the US dollar. Finally, the government repudiated its dollar peg, devalued its currency by about [...]
The Next Step for Greece (and the Euro)
Now that Greek Prime Minister George Papandreou has won a resounding vote of confidence in the country’s parliament, he can turn his attention to a few really difficult issues. In case you missed the irony in that sentence, Papandreou received 155 supporting votes, exactly 5 more than one-half of total votes cast. All 155 votes [...]
IMF Memo to Spain: Watch Your Step
The International Monetary Fund (IMF) has issued a statement on the reform measures implemented by Spain as that country grapples with its sovereign debt issues. While this is not enough to push the situation in Greece out of the headlines quite yet, it is worth a brief look. The statement reveals both the progress Spain [...]
Popular Sentiment Putting European Financial System At Risk
On Monday, the German government flip-flopped once again, vowing to delay extending additional funds to Greece unless the Greek government enacts stringent austerity measures designed to curtail spending in the Mediterranean nation. Ultimately, Germany might simply be engaged in a game of political chicken. If Greece is forced to withdraw from the euro and effectively default on [...]
Euro Tracking Hopes for Greece
Over the June 18-19 weekend, eurozone finance ministers were expected to reach an agreement that would have allowed the release of another tranche of about $17 billion in bailout funds for Greece. In what has become typical behavior, the ministers decided instead to delay the release of the funds until Greece accepts a controversial package [...]
Ireland Raises Haircut Issue Again
The European Central Bank is not having a good week. The bank’s efforts to quell the rising likelihood of a Greek default, and all the bad things that would flow from that, aren’t getting any help from Ireland. Not that the ECB should have expected it. Ireland’s finance minister has once again suggested that some [...]
Greece Continues to Pressure Euro
It no longer may matter how the rest of the eurozone decides to deal with Greece and its sovereign debt. Both of the plans currently under consideration would be deemed a default. The European Central Bank and France want to persuade bondholders to roll their bonds into new issues when the existing bonds mature. Germany [...]
Eurozone Examines Two Nasty Options: Swap or Roll?
Ahead of the June 23-24 meeting of all 27 European Union members, the single currency portion of the EU is trying to reach an agreement on the second bailout package for Greece. Germany is supporting a proposal that would force Greece’s creditors to swap existing bonds for new bonds with a much longer maturity date. [...]
Euro No Longer Hostage to Greece?
Yesterday, ratings agency Standard & Poor’s cut Greek debt to the lowest possible rating: “CCC”. That’s three steps lower than the country’s previous “B” rating. Surprisingly, the EURUSD strengthened following the announcement, leading one to wonder what might be happening. First of all, S&P is the last of the three major rating services to issue [...]
