Wednesday, July 06, 2011

Next Up: Portugal

Now that the Greek debt crisis has been solved*, it's time to revisit Portugal.
LONDON—Portuguese bond prices plummeted and the euro slumped Wednesday after Moody's downgraded the country to junk status, disqualifying the country from an index of sovereign debt and triggering a selloff...

The yield spread between Portuguese two-year bonds and safe-haven German two-year paper widened by more than two percentage points and the yield on Portuguese 10-year bonds rose by nearly 1.3 percentage points to 12.84%, taking the 10-year spread to Germany to over 9.8 percentage points, according to Tradeweb.
These "fixed" crises just won't stay fixed!

When do we start thinking about rescue packages for German banks?

* - Until next week or maybe a little later.

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