Debt disaster fears rumble from Athens to London

[ASusilovic]

FRANKFURT (MarketWatch) -- Rumors of a debt disaster are swirling around Europe, from Athens to Madrid and all the way to London.

Investors have rushed to sell Greek bonds since the newly elected government of George Papandreou made a startling revelation: the deficit will soar to over 12% of gross domestic product this year, well above previous official projections.

Greece's predicament has escalated concerns about contagion in other European countries whose finances are in poor shape. Just this month, the ratings of Greece have been cut both by Fitch Ratings, and, late Wednesday, by Standard & Poor's, and major agencies have warned Spain and Portugal of possible cuts.

http://www.marketwatch.com/story//debt-disaster-fears-rumble-from-athens-to-london-2009-12-16

 

[Rabbitone]

IMHO this is a big part of why the dollar is up. If it becomes a rush to the dollar we may see stock market jitters.

 

[zdreg]

Quote from Rabbitone:

IMHO this is a big part of why the dollar is up. If it becomes a rush to the dollar we may see stock market jitters.

IMHO is suitable for yahoo chat. your conclusion is not a major insight. it is wall street consensus

 

[S2007S]

More debt fears only means markets going higher, there should not be any worries. The US is running debt up like crazy and the markets love it, the higher the deficit the higher the markets move. The US is raising the debt ceiling to approx: $14 trillion which is 100% of our GDP. Deficits of epic proportions is the way to fix everything and anything in any economy that's upside down.

 

[Rabbitone]

Quote from zdreg:

IMHO is suitable for yahoo chat. your conclusion is not a major insight. it is wall street consensus

You use your methods I will use mine. I used IMHO because I did not back up my opinion with factual information as 90% of the responders on this forum demand. Like this article that states that sovereign debt concerns in the European Monetary Union is only a partial concern of the market.

http://www.futuresmag.com/News/2009/12/Pages/The-dollar-shift.aspx

 

[ralph00]

Equities up another 1% +. If Greece and Spain go down, I would expect Dow 12K.

 

[adadadog]

This may have overwhelmed every other factors on the market. The U.S. GDP did not even move the market a bit this 8:30am EST.

 

[ralph00]

We're days away from the end of the 4th quarter. I can't imagine a more irrelevant piece of 'news' than some revision of 3rd quarter GDP.

 

[S2007S]

On December 14, Prime Minister George Papandreou announced measures to cut Greece's deficit to 3% of GDP by 2013 from the current 12.7%.


Their Deficit is only 12.7% of GDP while the US is closing in on 100% of GDP.

 

[adadadog]

Quote from ralph00:

We're days away from the end of the 4th quarter. I can't imagine a more irrelevant piece of 'news' than some revision of 3rd quarter GDP.

Agreed. Things are very strange.