When I look at this chart I see 5 countries whose interest rates were as low as Germany’s rates until 2009. And then suddenly all hell broke loose. Their debt loads were extreme in 2008, but no one worried about it until the shit hit the fan. The U.S. has ten year rates of 1.6%, but our debt load accelerates by $3.8 billion per day. It won’t matter until it matters. Then our shit will hit our fan.
Saturday, Greeks will head to the polls in a second attempt to form a government — an election/government that may ultimately determine if Greece remains in the euro zone. While the implications for Greece are dramatic, there is concern that a Greek exit would threaten other euro zone members (e.g. Spain and Italy) and potentially test the ability of European institutions (e.g. the European Central Bank) to prevent contagion. Today’s chart helps illustrate the risk of European debt by plotting out the 10-year government bond spread (versus the German Bund) for all the PIIGS (i.e. Portugal, Italy, Ireland, Greece, and Spain) from 2007 to the present. For example, the Greek 10-year government bond yield (light blue line) is currently 27 percentage points greater than that of the relatively stable German Bund. That is a far cry from where it was back in the summer of 2009. Currently, however, many are focused on the third and fourth largest euro zone economies (i.e. Italy and Spain). A run on the financial institutions of these more substantial economies would have global implications. It is noteworthy that the Italian and Spanish 10-year government bond spread has not declined after the ECB offered three-year loans in December and February.
TeresaE says:
You are so right, it won’t matter until it matters.
Then a lack of preparedness on the part of 300+million of our neighbors is going to constitute a huge emergency on the rest of our parts.
I hate it when that happens, which in fasteners is (was) daily.
MF’er, I am so freaking frustrated. The world is going to hell and I see the money to save my family but am unable to do so because of normalcy bias, apathy and sloth.
I wish I didn’t see what was coming, because I would go forth and take the first decent near full time job I can find, and blow this joint.
Instead I sit and Franklin it, because no matter how worthless someone is now, when the world is relatively easy, they have to be able to pull their shit together and survive when times are tough?
Right?
dammit, I’m half trashed and I know the answer to that.
Anyway, yep it ain’t going to matter until it hurts. Same as it was, same as it is, same as it will be.
So it goes.
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15th June 2012 at 10:22 pm
Stigmation says:
T
I feel your pain. However, I have to ask. what is a franklin?
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15th June 2012 at 1:28 am
Stigmation says:
BTW I am in the bag too.
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15th June 2012 at 1:29 am
OF says:
It won´t matter, until it matters: that´s the bitch with trust, confidence and reputation…
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15th June 2012 at 3:35 am
taxSlave says:
The only way to read this site is inebleated, er inebrhated, ah I mean drunk.
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15th June 2012 at 2:55 pm
Stigmation says:
T
I still want to now what a franklin is FFS !!!! My imagination is just running wild!!!
Still in the bag BTW
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15th June 2012 at 5:46 pm
IndenturedServant says:
Urban dictionary has many definitions for “Franklin” though I’m not exactly which one T is referring to.
I_S
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15th June 2012 at 9:20 pm
Administrator says:
Guess what made it into the urban dictionary.
FSA – Free Shit Army
The bastards didn’t give TBP credit.
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15th June 2012 at 9:32 pm