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A "disastrous" German bond sale on Wednesday sparked fears that Europe’s debt crisis was even starting to threaten Berlin, with the leaders of the euro zone’s two biggest economies still firmly at odds over a longer-term structural solution.
Investors were also unnerved by reports that Belgium is leaning on France to pay more into emergency support for failed lender Dexia under a 90-billion-euro ($120 billion) rescue deal that had appeared done and dusted.
A special report by Fitch Ratings suggested France had limited room left to absorb shocks to its finances like a new downturn in growth or support for banks without endangering its cherished AAA credit status.
Huh, wonder how that happened? could it be that bond holders took a 50% loss on greek bonds and maybe learned a lesson. Or could it be that they see Germany bailing out other countires and it made them skittish.The bond market, you are ok if you are not the last ones holding the bag.
What do you think will happen in a few days with ours?
I don't know.
What's the 2011 Budget Deficit? $1.5 TRILLION or something?
I have to believe they've been trying to auction it off since the debt ceiling was raised. That was one of the issues surrounding the "debt-ceiling crisis."
Government was out of cash and had to sell bonds, but couldn't, because that would put them over the ceiling. No one has any money, not $1.5 TRILLION anyway. Don't forget you have $1.7 TRILLION in 1-year notes due in April 2012. It will be interesting to see if investors dump them or roll them over.
What's the 2011 Budget Deficit? $1.5 TRILLION or something?
I have to believe they've been trying to auction it off since the debt ceiling was raised. That was one of the issues surrounding the "debt-ceiling crisis."
Government was out of cash and had to sell bonds, but couldn't, because that would put them over the ceiling. No one has any money, not $1.5 TRILLION anyway. Don't forget you have $1.7 TRILLION in 1-year notes due in April 2012. It will be interesting to see if investors dump them or roll them over.
If they can't sell them, it'll force budget cuts.
That's been pretty much what I'm curious about. I have to take the pessimistic road but I'll have to be honest about the whole deal, I'm just learning about this side of the economy and how it works.
It might be good to force budget cuts as long as the cuts are focused in the right places. IMO.
From what I understand: Their bonds are deemed very safe and therefore the interest rate is very low. After all, a low interest rate means the government can raise money cheaply, but who wants that when you have high risk countries all over the planet that have to sell it for high interest to even sell it at all. So it's actually good for Germany. If this continues, they will have to add interests so they can sell it, but it would be still much cheaper than other countries that gotta sell their debt for much higher rates.
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