EU- Going down the economic Shxthole- Why-
This is a major wakeup call to the EU- get your act together- China is in Shxt Shape economically as well-
Are we headed for another dirty 30's- I think so. But then I am just a DDH- Dumb Down Homer.
Moody
The debt crisis that has plagued the euro zone for more than two years now threatens its top-rated nations – including Germany – amid mounting concerns that Spain is teetering on the brink of collapse.
Moody’s Investors Service struck at the core of the 17-member monetary union late Monday, revising to “negative” from “stable” its view of the triple-A ratings of Germany, the Netherlands and Luxembourg.
The influential U.S. ratings agency cited the escalating troubles in the euro zone, the possibility of Athens departing and the troubling possibility that vastly larger Spain and Italy will need to be rescued by their European partners.
Moody’s move illustrates how the virus that began in Greece and quickly spread through the peripheral European countries is now infecting the core. That raises the possibility of higher debt costs for the more fiscally sound countries that have so far escaped a rash of downgrades and attacks by bond vigilantes.
The latest development came as Spain’s crisis heightened, with benchmark 10-year bond yields surging at one point to a euro-era record of almost 7.6 per cent, while Italy’s widened to a six-month high.
Fears are growing that Madrid itself is on the verge of seeking a massive bailout from its European partners, which would put the future of the euro in grave doubt.
“At this stage, a Spanish bailout to cover the exchequer financing needs for 2013-14 is virtually unavoidable,” said Constantin Gurdgiev, a finance lecturer at Trinity College in Dublin.
The troubles in Spain sent tremors through nervous global markets. Bond, equity and commodity investors around the world headed for U.S. Treasuries, Canadian government debt and other harbours considered relatively safe from increasingly stormy European seas. The sharp decline in Spanish stocks amid rising volatility prompted the market regulator to prohibit short-selling for three months. Italy has imposed a one-week ban on shorting of certain bank and insurance stocks.
Investors are losing confidence in the ability of the Europeans to keep their single currency from failing. The euro plunged against other major currencies, reaching its weakest level against the U.S. dollar in two years, and a record low against the Canadian dollar.
Markets are at the limits of their patience, said Alex Jurshevski, managing partner with Recovery Partners in Toronto, which advises governments on how to manage debt crises. We’ve come along three, four years in a process that seemingly has had no clearly announced objective, no set of milestones. “What we saw was the markets saying, ‘Enough is enough.’”
The latest developments and the harsh reacton in bond and equity markets have heightened fears that Spain is rapidly running out of fiscal manoeuvring room. Spain’s deteriorating finances and the perilous fiscal state of key regional governments are not news to the markets.
But the warning flags posted by Moodys are bound to worsen the already sour market mood. “The rising uncertainty regarding the outcome of the euro area debt crisis given the current policy framework, and the increased susceptibility to event risk stemming from the increased likelihood of Greece’s exit from the euro area, including the broader impact that such an event would have on euro area members, particularly Spain and Italy,” the agency said.
This is a major wakeup call to the EU- get your act together- China is in Shxt Shape economically as well-
Are we headed for another dirty 30's- I think so. But then I am just a DDH- Dumb Down Homer.
Moody
The debt crisis that has plagued the euro zone for more than two years now threatens its top-rated nations – including Germany – amid mounting concerns that Spain is teetering on the brink of collapse.
Moody’s Investors Service struck at the core of the 17-member monetary union late Monday, revising to “negative” from “stable” its view of the triple-A ratings of Germany, the Netherlands and Luxembourg.
The influential U.S. ratings agency cited the escalating troubles in the euro zone, the possibility of Athens departing and the troubling possibility that vastly larger Spain and Italy will need to be rescued by their European partners.
Moody’s move illustrates how the virus that began in Greece and quickly spread through the peripheral European countries is now infecting the core. That raises the possibility of higher debt costs for the more fiscally sound countries that have so far escaped a rash of downgrades and attacks by bond vigilantes.
The latest development came as Spain’s crisis heightened, with benchmark 10-year bond yields surging at one point to a euro-era record of almost 7.6 per cent, while Italy’s widened to a six-month high.
Fears are growing that Madrid itself is on the verge of seeking a massive bailout from its European partners, which would put the future of the euro in grave doubt.
“At this stage, a Spanish bailout to cover the exchequer financing needs for 2013-14 is virtually unavoidable,” said Constantin Gurdgiev, a finance lecturer at Trinity College in Dublin.
The troubles in Spain sent tremors through nervous global markets. Bond, equity and commodity investors around the world headed for U.S. Treasuries, Canadian government debt and other harbours considered relatively safe from increasingly stormy European seas. The sharp decline in Spanish stocks amid rising volatility prompted the market regulator to prohibit short-selling for three months. Italy has imposed a one-week ban on shorting of certain bank and insurance stocks.
Investors are losing confidence in the ability of the Europeans to keep their single currency from failing. The euro plunged against other major currencies, reaching its weakest level against the U.S. dollar in two years, and a record low against the Canadian dollar.
Markets are at the limits of their patience, said Alex Jurshevski, managing partner with Recovery Partners in Toronto, which advises governments on how to manage debt crises. We’ve come along three, four years in a process that seemingly has had no clearly announced objective, no set of milestones. “What we saw was the markets saying, ‘Enough is enough.’”
The latest developments and the harsh reacton in bond and equity markets have heightened fears that Spain is rapidly running out of fiscal manoeuvring room. Spain’s deteriorating finances and the perilous fiscal state of key regional governments are not news to the markets.
But the warning flags posted by Moodys are bound to worsen the already sour market mood. “The rising uncertainty regarding the outcome of the euro area debt crisis given the current policy framework, and the increased susceptibility to event risk stemming from the increased likelihood of Greece’s exit from the euro area, including the broader impact that such an event would have on euro area members, particularly Spain and Italy,” the agency said.
