Tags: Eurozone | Contagion | Epidemic

WSJ: Eurozone Contagion Reaching Epidemic Proportions

By    |   Tuesday, 15 Nov 2011 01:25 PM

The eurozone debt crisis contagion is reaching epidemic proportions as it spreads throughout the continent.

French, Spanish, and Belgian bonds are suffering as yields rise and there are signs that Netherlands, Austria and Finland are not immune from the contagion, reports an article in The Wall Street Journal.

At this rate, only Germany will remain as the eurozone "core," the article predicts.
__________________________________________________________

‘You Opened My Eyes to the Catastrophic Enormity of This Financial Debacle’
Debt ceiling ‘medicine will become the poison,’ according to famed economist. Brace for economic meltdown. Watch the Aftershock Survival Summit Now, See the Evidence.

__________________________________________________________

French, Spanish and Belgian 10-year bond yield spreads over German bunds have just set new records, the article notes. Italian bond yields also jumped, going over 7 percent again.

That means investors are demanding higher returns for those non-German bonds that they view as increasingly risky.

The cost of insuring Italian, French, Spanish and Belgian debt through credit default swaps also jumped to record highs.

But the real cause for concern is that AAA-rated countries like Netherlands, Finland and Austria will catch the debt crisis disease, according to the article.

For instance, Austrian yield spreads over Germany have reached new euro-era highs and debt insurance for Austrian debt was up substantially. That could be due to Austria's historic ties to Hungary, which investors fear might lose its investment-grade rating.

The Financial Post, noting that yields of non-German bonds have jumped, also reported that the crisis is spreading to the eurozone core.

"The fact that Holland and Austria are moving out - countries which were seen as cohorts of Germany in the past — is a worrying development," Nick Stamenkovic, rate strategist at RIA Capital Markets, told the Post. "Investors are looking to Germany given the worries not just about Italy and Spain but about the future of Europe as a whole."

Also, German Chancellor Angela Merkel’s Christian Democrats approved a non-binding resolution that says eurozone countries can opt to leave the euro if they cannot meet its fiscal guidelines.

“The term “EMU exit” is now out there as a concept,” the Post quoted ING rate strategist Padhraic Garvey as saying.

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
The eurozone debt crisis contagion is reaching epidemic proportions as it spreads throughout the continent. French, Spanish, and Belgian bonds are suffering as yields rise and there are signs that Netherlands, Austria and Finland are not immune from the contagion, reports...
Eurozone,Contagion,Epidemic
1890
2011-25-15
Tuesday, 15 Nov 2011 01:25 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved