Thursday, April 7, 2011

The European Contagion - spreads as expected.

The Portuguese bailout could rise as high as $129 billion according to latest reports. Prime Minister Jose Socrates announced yesterday that Portugal would request EU funding but it appears that many details of the package have already been worked out. - My take - Ultimately it is going to be more than the figure of $ 129 billion mentioned. All the cockroaches are not detected yet!


Spain's economy minister Elena Salgado has ruled out a Spanish bailout. The country passed its first 'contagion test' after it raised €4.1bn in bond sales Thursday. - My take - "One swallow does not a summer make" - Contagion test or not, Spain is headed to a bailout.



37 Comments:

At April 16, 2011 , Blogger Vikram R Chari said...

The contagion has spread and is leading to defaults - not un-imaginable. Read below:

Ex-PM says Greece should restructure debt: report http://dlvr.it/NkYj5

Europe debt crisis: Talk grows of allowing Greece, Ireland and Portugal to default on their bailout http://bit.ly/hjjImN

 
At April 18, 2011 , Blogger Vikram R Chari said...

Portugal aid talks enter key phase under Finnish cloud http://dlvr.it/Nt141

 
At April 18, 2011 , Blogger Vikram R Chari said...

Greek 10-year yields have surged to 13.936%, though Finance Minister George Papaconstantinou has denied rumors of debt restructuring. It was reported that Greece requested an extension to repay its debt but was denied by the European Commission and the European Central Bank.

 
At April 18, 2011 , Blogger Vikram R Chari said...

Moody's has downgraded Irish government-backed banks to junk status. The ratings agency said the decision follows last week’s downgrade of Ireland’s sovereign rating to a level just one notch above official junk status.

 
At April 18, 2011 , Blogger Vikram R Chari said...

A short note about Spain - Today's Spanish debt auction of short-term securities produced higher yields than expected, and has put pressure on the Spanish sovereign. The bank sold €3.5 billion of 1-year treasury bills at an average yield of 2.77% and 18-month treasury bills worth €1.1 billion, at an average yield of 3.36%.

 
At April 19, 2011 , Blogger Vikram R Chari said...

Greece pays price of debt worries http://bbc.in/dNKpHf

 
At April 20, 2011 , Blogger Vikram R Chari said...

Talk of restructuring Greece’s debt is unlikely to solve the country’s economic woes http://econ.st/ebMYWR

 
At April 26, 2011 , Blogger Vikram R Chari said...

Greek deficit worse than thought http://bbc.in/dK1hU4

 
At April 29, 2011 , Blogger Vikram R Chari said...

Economic data for Spain was out today (April 29th), unemployment reached 21.3% and retail sales decreased for the ninth straight month, falling by 8.6% year-over-year.

 
At May 03, 2011 , Blogger Vikram R Chari said...

Portugal reaches bailout deal: http://tgam.ca/CTEA

 
At May 04, 2011 , Blogger Vikram R Chari said...

Portugal bail-out: Portugal is to get a €78bn ($116bn) bail-out from the European Union and the International... http://on.ft.com/jbhelX VIDEO:

Portugal bailout in spotlight http://bbc.in/kcFa6o

 
At May 05, 2011 , Blogger Vikram R Chari said...

Portugal 'to sink into recession' http://bbc.in/kRgGiA

 
At May 06, 2011 , Blogger Vikram R Chari said...

Reuters FLASH News - Greece raises possibility of leaving euro zone and reintroducing own currency -report

 
At May 07, 2011 , Blogger Vikram R Chari said...

Interactive Map: Debt Rising in Europe http://ow.ly/1sQJYi

 
At May 07, 2011 , Blogger Vikram R Chari said...

Portugal's PM boasts that the country’s bail-out deal is more lenient than those for Greece and Ireland http://econ.st/mbaKdk

 
At May 08, 2011 , Blogger Vikram R Chari said...

http://tinyurl.com/3pob8b8 - Debt Rising in Europe - Interactive NY Times Map.

 
At May 09, 2011 , Blogger Vikram R Chari said...

Greece's credit rating cut by S&P; euro gains pared http://ow.ly/1sSr87 Ratings agencies hammer Greece in EU chaos http://t.co/7tLqvNf

 
At May 13, 2011 , Blogger Vikram R Chari said...

IMF in eurozone contagion warning http://bbc.in/ifdeVL I.M.F. Warns Europe’s Debt Crisis Could Still Spread http://nyti.ms/m2Iyjn

 
At May 14, 2011 , Blogger Vikram R Chari said...

Europe's debt crisis is a year old and no closer to being solved http://econ.st/mau28m

 
At May 20, 2011 , Blogger Vikram R Chari said...

IMF approves €26-billion loan for Portugal: http://tgam.ca/C1TT

 
At May 23, 2011 , Blogger Vikram R Chari said...

Euro contagion fears hit Spain and Italy: Worries over contagion spread to Europe’s equity markets, with stock markets falling http://on.ft.com/lfKwFC

 
At May 25, 2011 , Blogger Vikram R Chari said...

Greece's 100 billion-euro shadow over banks http://reut.rs/mem4Rm

 
At June 02, 2011 , Blogger Vikram R Chari said...

Greece to present new austerity plan after Moody's cut its credit rating deep into junk territory http://t.co/ZyYCYZK

 
At June 03, 2011 , Blogger Vikram R Chari said...

New Greece aid package 'agreed' http://bbc.in/k26nuQ

 
At June 03, 2011 , Blogger Vikram R Chari said...

EU, IMF Say Greece Likely to Get Next Tranche of Aid by Early July

 
At June 13, 2011 , Blogger Vikram R Chari said...

Greek debt downgraded by S&P http://ow.ly/1tKozB

 
At June 19, 2011 , Blogger Vikram R Chari said...

June 19, 2011 - Europe fails to agree on Greek aid payout http://bloom.bg/mTaU2R

 
At July 03, 2011 , Blogger Vikram R Chari said...

Euro zone warns Greeks on sovereignty and privatization - http://reut.rs/k0z0TV
(Reuters) - Euro zone finance ministers have approved a 12 billion euro ($17.4 billion) installment of Greece's bailout, but signaled that the nation must expect significant losses of sovereignty and jobs.
This is what will happen if countries go on an unbridled incautious path of "growth to nowhere".

This is a warning to other potential Eurozone countries - Portugal, Ireland, Spain......

 
At July 04, 2011 , Blogger Vikram R Chari said...

Greece needs Herculean reforms to secure bailout: http://tgam.ca/Cd2b

 
At July 04, 2011 , Blogger Vikram R Chari said...

S&P warning adds default threat to Greece's bailout http://reut.rs/k2Itgb

 
At July 06, 2011 , Blogger Vikram R Chari said...

From the Economist -

A chart showing the yields on 10-year Greek debt over the past three months. The pattern?

There's a spike, followed by a decline, followed by a higher spike, followed by a decline to a higher trough, and so on. European leaders keep taking steps to avert disaster, and each time markets are less assuaged.

The latest spike corresponds to the stalemate over the IMF's willingness to continue making bail-out payments without a new, long-term rescue package in place (and the corresponding disagreement over how to rollover Greek debt, plus the drama surrounding the passage of Greece's new austerity plan). The IMF agreed to keep paying, French and German banks seemed willing to sign on to a rollover plan, and Greece got its new austerity programme through parliament. But it wasn't long before trouble kicked up again.

Moody's and Standard and Poor's have both suggested that the agreed-upon rollover plan might well constitute a default. Since that's precisely the outcome European leaders were hoping to avoid, this news has sent everyone scurrying to come up with a new and better deal. Meanwhile, Moody's has cut Portugal's debt rating to junk. Portugal may well need a new rescue package, which will surely include debate over the fate of creditors, which will mean more questions about bank finances and more brinksmanship. And the European economy continues to slow, even as the European Central Bank continues to tighten policy.

I don't know that there's any broad lesson here, other than: for all the steps already taken by European leaders, the euro zone hasn't really gotten any closer to solving the underlying issues of insolvency and institutional weakness.

 
At July 18, 2011 , Blogger Vikram R Chari said...

EU bank stress tests missing sovereign defaults fail to convince analysts | http://bloom.bg/mWp7xI

 
At August 02, 2011 , Blogger Vikram R Chari said...

Spain debt fears reach new record http://bbc.in/n77k0L

 
At August 02, 2011 , Blogger Vikram R Chari said...

Reuters Analysis: Worsening euro crisis may force bigger rescue fund http://reut.rs/rfcv9m

 
At August 03, 2011 , Blogger Vikram R Chari said...

EconBizFin: Chart: Soaring Spain/Italy bond spreads: the euro zone's "out-patients" get sicker $ECB http://ow.ly/5UrYL - The Economist.

 
At September 06, 2011 , Blogger Vikram R Chari said...

Some European countries may have to be excluded from the euro-zone to make the union more sustainable http://econ.st/qxUmRh

 
At September 06, 2011 , Blogger Vikram R Chari said...

UBS: Euro break-up - the consequences http://bit.ly/oajsgm

 

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