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[Bond markets] Excited about a change in Govt...

  • 22-11-2010 4:17pm
    #1
    Stevie Dakota
    Closed Accounts Posts: 2,817 ✭✭✭


    The credit default swap on Greek government debt just jumped over the 1,000 basis point mark - a 37bp rise on the day.

    That means that bond-holders now have to pay more than €1m to insure €10m of Greece's debt for five years -- implying a serious risk of default or restructuring.

    As I mentioned earlier, Portugese CDS are also up around 40bps, at 460bp. Irish government debt is also being hit, with the five-year CDS rising 25 basis points at 530bp. Not what you'd hope for, if you'd just agreed to seek a landmark bailout that is being billed as the saviour of the eurozone.

    Spanish debt is also suddenly looking riskier -- up 20 basis points at 281bp.

    The trigger for these sudden rises is the politicial uncertainty in Ireland, and the alarming prospect for the City that the Irish budget might not be approved. That could send then entire €90bn rescue deal crashing down, traders fear, dealing a potential death blow to the Irish banking sector - sending shockwaves across the European economy.


Comments

  • #2
    paddy462
    Closed Accounts Posts: 61 ✭✭paddy462


    Austerity measures will have to be taken. I think most people, though hard to, will acknowledge this. I'd prefer it to be done by a government that has not led us into this mess.


  • #3
    dan_d
    Closed Accounts Posts: 2,819 ✭✭✭dan_d


    paddy462 wrote: »
    Austerity measures will have to be taken. I think most people, though hard to, will acknowledge this. I'd prefer it to be done by a government that has not led us into this mess.

    :confused::confused:
    Surely we're already fooked, and already taking the measures.
    I'm not sure what we're supposed to do regarding bond spreads for other countries.Obviously we need to pass our budget no matter what....but that appears to be completely out of the hands of the Irish people.


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