Global shares, euro fall on debt fears

Global shares, euro fall on debt fears

economictimes.indiatimes .com

Global shares hit three-month lows and the euro fell to an eight-month low against the dollar on Friday as euro zone sovereign debt problems and nerves ahead of US jobs data led investors to dump riskier assets.

The euro hit its weakest level against the dollar in more than eight months as widening government bond spreads highlighted concerns over the ability of some euro zone governments to pay their debts.

"Widening euro zone CDS and bond spreads over German Bunds are making investors less confident, which is weighing on the euro and putting pressure on equity markets," said Jeremy

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It looks like the European government bond is the latest bubble in the international market after the U.S housing prices crash of 2008. After Greece, Portugal and Spain have joined the list of European countries with troublesome government bonds. Social unrest is increasing in countries like Spain and Greece. A potential no confidence motion threatens the survival of the current Spanish government.What remains to be seen the level of impact of this debt crisis over other economies.

economictimes.indiatimes .com
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Spain will go burst.
Their economy is the most toxic in the Western world - which will spread to Portugal. Britain is VERY luckily not to be suffering similar fate, the fact we are out of the Eurozone has played a significant factor in investors not dumping British debt or currency.

Originally posted by infinite
Spain will go burst.

If their government liquidates.. it is very possible.

If not, they should be tight once they cut their public spending. The property and holiday markets are not going to rebound for them for quite some time so that possible toxicity will remain for a couple of years but if they stabilize their public spending and debt, that won't really matter unless there is another global dip..

The Irish Government got it together, the federal EU are stepping in to monitor the Greeks while they cut their spending. Spain and to a lesser extent Italy need to pull back on their deficits and spending pretty quickly.

Spain has always been a little too socialist for my liking, this might be an opportunity for them to cut their more socialist ventures and strengthen their regulation in the holiday property markets.

The EURO will be fine, it needs to be weakened slightly on the market anyway.. albeit, not this way.

Once these countries start to show any real sign of trouble to the EURO, the EU commission will crack the whip. Italy may be large enough to crack back but Spain will sort themselves out.