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  • Irish, Portuguese government bond yields up sharply – the end of moral hazard?

    Alexander Gloy

    Irish 10 year government bond yields on Monday reached a new high of 7.1% (compared to a May-crisis peak of below 6%). Portuguese yields shot up to 6.10% (+0.15). All this on the back of the Franco-German proposal to “allow” bondholders to suffer losses in a future debt crisis (read: debt restructuring a.k.a. default). Suddenly…

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  • Are politicians signaling imminent debt restructuring?

    Alexander Gloy

    Now things get interesting. If you listen carefully, politicians and central bankers suddenly seem to signal an imminent debt restructuring for Greece. Everybody except the rating agencies seem to get the memo. According to a Sunday newspaper, Greek Deputy Prime Minister Pangalos uttered the fatal sentences: “Debt exists to be restructured. We may pursue it…

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  • Trading olives and feta cheese for submarines is a losing proposition

    Alexander Gloy

    Greek 10-year government bond yields, after having graced 8.73% merely a good week ago, are back with a vengeance (9.67%). Where is the insatiable demand for Greek bonds from China? On October 22, Eurostat published revised Euro zone government deficit and debt figures for 2009. One country was missing – Greece: “Eurostat is not publishing…

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  • Chinese PM Wen bathes in 290 tonnes of olive oil while buying Greek bonds

    Alexander Gloy

    My favorite pinata (http://www.youtube.com/watch?v=wi3semJPQzk), Greece, has received some help from China. On a visit to Greece (first by a Chinese Prime Minister in 24 years), Wen said China had bought some Greek government bonds and would do so again in the future. This has helped bring down 10-year Greek government bond yields below 10% for…

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  • Ireland might be downgraded again; Euro strength hurts

    Alexander Gloy

    Moody’s warned it may cut Ireland’s credit rating again as the country has to foot a huge bill from bailing out its banks. For now, the recent rise in Irish government bond yields seems to have been halted: 10 year Irish government bond yield. Source: Bloomberg.com As the house of cards (Euro zone) is wobbling…

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  • Ireland’s bank bail-out cost reaches EUR 50bn; bond sales suspended

    Alexander Gloy

    Irish Prime Minister Brian Cowen just announced the government decided to cancel all bond auctions for the rest of the year because of “market turbulence”. The 10yr yield, after having reached a record 6.8% in recent days, retreated to 6.57%. Irish 10 year government bond yield. Source: Bloomberg.com On Thursday, Finance Minister Brian Lenihan revealed…

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  • Ireland’s solvency now ranked between Pakistan and Ukraine

    Alexander Gloy

    Ireland is now right between Ukraine and Pakistan when it comes to likelihood of default (which, over the next 5 years, is at 35%). This after Irish GDP fell 1.2% in Q2 (vs +0.5% expected) and Q1 growth rate was revised down to 2.2% (from 2.7%). GNP (gross national product) fell 4.1% (-2.7% expected). Irish…

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  • Former German FinMin says Greece will default

    Alexander Gloy

    From an interview (9/14/2010) with German magazine “Der Spiegel” former German Finance Minister Peer Steinbrueck (2005-2009): SPIEGEL: In the end, the euro-zone countries approved a bailout package that required Athens to impose a drastic austerity program and that includes loans worth €110 billion. Are the measures sufficient? Steinbrück: Just look at the numbers. Despite the…

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  • Portuguese bond auction: high yields, low demand

    Alexander Gloy

    10 year Portuguese government bond yields today retreated to 6.13% (from 6.31%) after the auction of fresh government debt: EUR 450m of 4yr paper at 4.70% (vs 3.62% at previous auction) and 300m of 10yr debt at 6.24% (vs 5.31%). The total of EUR 750m raised was at the low end of the planned 750m-1bn…

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  • Irish bond auction a “success” – EFSF would have been cheaper

    Alexander Gloy

    10yr Irish government bond yields eased today to 6.29% (-0.19) after the “successful” auction of 3 1/2 (yield 4.77% vs 3.63% at previous auction) and 8 year (6.02% vs 5.09%) new government debt. This now has cemented the fact that it would be cheaper for Ireland to ask the EFSF (European Financial Stability Fund) for…

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