The PIIGS Are Back at the Trough

by Marilou Long on May 24, 2011

in Bonds,Credit Crisis,Debt,Foreign Markets,Geopolitical

The ratings agencies are still behind the curve on the downgrades of European sovereign debt.  S&P said that it may downgrade Italy, and Greece’s fiscal problems are once again affecting global markets.  Bond yields in the weakest countries continue to rise, and there is discussion about further bailouts for Greece.  From the linked Bloomberg article:

“The bond market is the only language policy makers will listen to,” Axel Merk, chief investment officer for Merk Investments LLC said in an interview with Bloomberg Television’s Betty Liu. “Once the bond markets impose austerity on the country that’s when they follow through, when there is a backing off, when things are going better, that’s when they lapse.”

Spain’s elections over the weekend also had interesting results.  The ruling Socialist party lost a lot of seats, and thousands of young people took to the streets to protest the lack of jobs and economic growth.

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