Wednesday, August 24, 2011

4% Greek 2 year bond yield jump spells DOOM for the Euro

Drama over Finland’s demand for collateral to back its loan to Athens has turned to tragedy for Greek yields, which saw their biggest rise on record on Wednesday. The Greek two-year bond yield jumped more than 4 percentage points to more than 44 per cent, as worries grew that Greece would not get the cash agreed just five weeks ago.

So says an article by James Mackintosh, in the "pink one" the FT, this evening, linked here! The cause of his despair? Why the Finn's Collateral Agreement, much discussed on postings over the past weeks on this blog, now even being noticed elsewhere! Seems it is about to derail Greek Bailout 2.0, just as predicted here  and could easily have been foreseen.

No matter, whether it is that or some other technical factor, the 21st July fudge was always doomed to crash. As I wrote on these pages first thing today, none of the guarantors of the EFSF can now really politically afford to back up their commitments, that is the real killer weakness. Worse, it didn't even buy the incompetent and indolent EU leaders the breathing space for the summer holidays, most of them apparently being absent, are still endeavouring to pretend to be enjoying!

Only the events in Libya are preventing matters getting completely out of hand, can Gadaffi evade capture until September, one wonders? If so perhaps the euro will see out the month!

More tomorrow!

Update21:33 Deutsche Welle on ECB's illegal bond buying, just in, linked here!



Post a Comment

<< Home