Tuesday, April 27, 2010

"The Contagion is Definitely Spreading and Spreading Quite Rapidly"

The EU is on the edge of crackup.

German Chancellor Angela Merkel said yesterday she won’t release funds to help Greece shore up its finances until the nation has a “sustainable” plan to reduce its budget deficit. Translation: Never.

Greek Credit Default Swaps have hit a new record high at 762bps.Short-term Greek paper is almost yielding 15%.The Athens Stock Exchange Index is down 5% today and is down 22 percent this year .

Italy is now entering the crisis, stage left. Italy's  6 month bill is yielding more than basket case Spain.

“The contagion is definitely spreading and spreading quite rapidly to Portugal, Spain, Ireland and Italy,” Mehernosh Engineer, a credit strategist at BNP Paribas SA in London, wrote in a report today. “The market has been in a show-me-the-money mode for well over three months and the lack of guidance is slowly and steadily sowing the seeds of a double-dip.”

I hope those are German bunds under your mattress.

UPDATE: Greek stock market now down 7%. Portugeese CDS now at 355.


  1. THIS is exactly what I wanted to know - when are the other little piggies going to start taking over the act from Greece. It seems like they may begin doing just that.

  2. Well, what do you expect? The Eastern Bloc countries proved conclusively that socialism does not work. Yet Greece and the other pigs still embraced it. Now what? Will the Euro collapse? what will happen to the dollar? Everything is up in the air, and very scary right now. Stock up on tuna and canned veggies!

  3. Tuna and canned veggies ??? Maybe cat food and fescue. and guns, seeds, water