Wednesday 9 November 2011

Italy and Greece: The Boat that Rocked?

Following up on yesterdays article, as Italy moves through the point of no return.....

Markets responded negatively to the news of 10 year Italian bond interest hitting a record 7%, as you might expect. Unfortunately this is merely the beginning. At this point Portugal, Greece and Ireland had to start bail out projects, as a result of an unsustainable debt profile.



"No one wants to lend to a country when that country would use the loan to pay the interest on previous loans - that's throwing good money after bad."


With stats like this is a return to <7% unlikely?



And LCH margins will only make the problem worse, especially when they need to roll over €360bn worth of debt in 2012. If Italy starts to go its going to make Greece look like a drop in the ocean. The Euro currency boat is really starting to list heavily which wave will push it over, or did that happen this morning?




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