CDR’s Tim Backshall was on CNBC‘s “Strategy Session” this morning, discussing the key trends in sovereign products over the past few months, pointing out the declining liquidity in both sovereign cash and derivative exposure.
“Do they default now or default later.”
The most interesting observation by Backshall is the declining halflife of risk-on episodes, which much like the SNB‘s (now declining) interventions, are having less of an impact on the market, as ever worsening fundamentals can only be swept under the carpet for so long before they really start stinking up the place.
As Backshall points out in the interview, even the IMF now realizes that soon the eventual second domino will fall, and it is better the be prepared, than to have to scramble in the last minute as was necessary in May.
The bottom line as Backshall asks is: “do they default now or default later.”
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This is happening as that “four months after the 110 billion- euro ($140 billion) bailout for reportGreece, the nation still hasn’t disclosed the full details of secret financial transactions it used to conceal debt” and that EuroStat still has not received the required disclosure about just how fake (or real) the Greek debt situation truly is.
One might certainly wonder just how bad – and unknown – the situation in Europe is…
EUR/USD (last 48 hours):
Related by the Econotwist:
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- Worries of European Sovereign Default Rattle the Markets (bloggingstocks.com)
- IMF Warns Countries on Rising Debt (online.wsj.com)
- Sovereign default – Unnecessary, Undesirable, and Unlikely (ftalphaville.ft.com)
- The Euro Just Took Another Sharp Leg Down, ECB Probing Undisclosed Greek Data (businessinsider.com)
- What If Greece Doesn’t Default? (online.wsj.com)
- Greek Deals Hidden From EU Probed as 400% Yield Gap Shows Doubt (businessweek.com)