Thursday, March 28, 2013

Debt Plague comes closer

Slovenia next in line to face debt woe

"As soon as policymakers averted a crisis in Cyprus, another appears to be brewing. The latest country to provoke concern is Slovenia. The small former Yugoslav republic took a beating, with long-term bond yields spiking to 5.4 percent amid fears the country would need a bailout. Those aren’t crisis-level rates — Cyprus’ yields are around 7 percent, for comparison — but it’s certainly in the danger zone. How did Slovenia get here, and why... (Reuters are also posting a webpage). Italy faces a possible debt downgrade (FX-MM) after a poor debt sale today. I'm sure that gullible investors in the UK will take Cameron's advice and BUY THAT HOUSE now, taking on lots of lovely debt! Go visit an EA this Easter :(

Posted by alan @ 07:10 PM (2227 views)
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10 thoughts on “Debt Plague comes closer

  • People in Europe laughed at their grannies for putting money under the matress.

    You know what they say about fashion….. it just keeps changing!

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  • Systems fail, when they fail their people. Numbers don’t matter when basic needs go begging.

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  • Slovenia has 2m people, compared with Cyprus’s 1.1m. Seems like the bankster vultures and one worlders are picking them off one by one.

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  • At the risk of straying into politics, the problem is that the Euro is mathematically unsound. You simply can’t have a single currency without a single government, as in the US. Even in the good times, the US suffered dozens of bank failures every year. These passed unnoticed because most depositors were insured. In Europe we’ve now decided that depositors are effectively uninsured, and that government bonds aren’t to be touched with a ten-foot barge-pole. The whole thing is a recipe for disaster.

    Time for a prediction (bearing in mind it’s post-pub o’clock):
    Cyprus will leave the Euro before the year is out. They have nothing to lose, everything to gain. Independent-mindedness comes more easily to island nations….

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  • Brightonrentfodder says:

    yes Drewster they should stick the knife into Brussels, where it hurts, and leave Europe !

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  • @Drewster,
    Good points. However, I can’t comprehend why Poland and Latvia want to join. Clearly they view things differently.

    I can’t see how small businesses can survive in Cyprus while the current regulations are in force (even those banking with “good banks” who were doing OK beforehand). Cash flow will need exceptional care, going forward. The loss of a chunk of working capital, built up over a lifetime could force painful bankruptcy.

    Now that the details have emerged, I can’t believe how incompetently the EU/IMF/ECB have acted, bearing in mind the Cyprus situation was flagged over a year previously. They give the impression that they don’t care, either.

    As with all things like this, the politicians go along a learning curve, each country is separately working out it’s destiny as events progress.

    As it’s Easter – a Christian festival, I’m reminded of Judas. He was the bad guy in the Easter story. He started off thieving, then after bribery, moved on to betrayal which led to a painful death. Am I stretching the analogy too far?

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  • @drewster

    cyprus to leave the eurozone? no chance …. nobody is leaving. and there’s no choice in this matter … all the governments are bought and paid for.

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  • happy mondays says:

    @7 – But the people are not!

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  • @8 Indeed

    Also worth noting that more countries, inside this little get together, may have more to gain from exit. Whereas only one has a lot to lose.

    Though, I’m beginning to think that more surprises are on the horizon. Game changing comes to mind……

    Who knows, the EU may yet prove to be your unlikely ally.

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  • I will take that wager Drewster, my reasoning is that Cyprus needs the EU, US and Russia to prevent further Turkish incursions. They will never leave the EU. They are also still effectively under US & UK military occupation. If they are wise they will play off, which they have rather clumsily being trying to do, the three power blocks.

    Russian hot money, huge EU structural investment, UK/USA military basis and a powerful neighbor who wants your land, its a heady combination

    A free Cyprus may end up with another civil war, so this is above and beyond euro economics/polotics

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