Greek Default: This Chart Reveals a Possible Date
Tired of living in a chronic state of “information overload?” Well, the good news is we’re jumping into the mix to help out.
Following from the adage that “a picture is worth a thousand words,” each Friday we select a handful of charts to put the week’s investment news into perspective for you. So say goodbye to long-winded commentary and hello to easy-to-understand pictures.
This week, our topic of interest is none other than the sovereign debt concerns in Europe (again).
The Never Ending Greek Tragedy
Last week, European leaders reached a Greek bailout deal. And the market rallied. But this week, Greek Prime Minister, George Papandreou, decided to throw a wrench in plans by calling for a referendum to decide whether or not to accept the terms.
Seriously George? Are you trying to guarantee a default and throw the global financial markets into a tailspin?
I don’t think Greece will ultimately default. But here are some key dates to keep an eye on. Specifically, when the country needs to pay up on its debt obligations.
Let’s hope somebody set up a reminder in Outlook so George remembers to pay his country’s bills on time!
The Italian Problem
The fear over a big fat Greek default is that it’s going to spark a debt contagion and lead to other European countries defaulting, too.
And those fears are increasing, especially for Italy.
The spread between safe German government bonds and risky Italian government bonds went vertical this week. In fact, Italy’s 10-year bond yield hit 6.3%. That’s almost triple the yield on Germany’s 10-year bonds.
Keep an eye on this spread. If it keeps widening, we’re going to have an Italian problem on our hands, too.
That’s all for this week. Before you sign off, though, do me a favor…
Let me know what you think about this weekly column – or any of our recent work at Wall Street Daily – by sending us an email to feedback@wallstreetdaily.com or by leaving a comment below.
And be sure to check your inbox on Monday. My colleague, Karim Rahemtulla, will further dissect the Greek default issue and offer his own unique solution.
Thanks and enjoy the weekend!
Ahead of the tape,
Louis Basenese
Related Topics: Economy and Politics, Market Analysis
