Bond vigilantes are alive in Greece. Chart is from BBH's Win Thin. It is clear than if you have a fixed income choice inside the EMU it is not to hold Greek bonds. Is this enough compensation? It is wider than some similarly rate corporates, but it is not clear how the budget will be balanced and taxed raised to bring this problem back in-line. You cannot inflate your way out of this problem and you cannot devalue the currency. The choices are limited.
Monday, January 25, 2010
Greek bond spread blow-out
Bond vigilantes are alive in Greece. Chart is from BBH's Win Thin. It is clear than if you have a fixed income choice inside the EMU it is not to hold Greek bonds. Is this enough compensation? It is wider than some similarly rate corporates, but it is not clear how the budget will be balanced and taxed raised to bring this problem back in-line. You cannot inflate your way out of this problem and you cannot devalue the currency. The choices are limited.
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