Saturday, May 29, 2010

Two down, six to go

With the Spanish government's debt downgrade, it would appear PIMCO's 'Ring of Fire' map is coming true.

What's the betting that the EU will make it illegal for rating agencies to give anything other than AAA gradings for EU sovereign debt? What's the subsequent betting that this will make absolutely no difference at all?

Pip pip!!


Anonymous said...

Frankly I am surprised that buying Govt Debt hasn't been made compulsory with all market participants being required by law to hold x% of their portfolio in Govt debt.

This might sound silly but the view is abroad that "these people" created this crisis. Govts and the People are the innocent party. They (Market Traders, Speculators, Bankers - the latest bogeyman of choice) are therefore making the situation even worse by demanding that Govts reign in their spending - thus forcing the people to suffer again for their mistakes.

I stress that I think this is bollocks but I think some European Govts might be prepared to travel down the path implied by such rhetoric.

Jack Maturin said...

They'll start with pensions.

It will be illegal to save unless you put at least 50% of your savings into government bonds.

For 'riskless' safety reason, au naturellement.

Anonymous said...

I believe that British Pension Fundas are already required by law to hold a certain percentage of their portfolio in 'safe' UK government bonds.


Jack Maturin said...


"You can buy any savings plan you like, so long as 40% is invested with the Corleone Olive Oil Business."

Expect them to raise that percentage, whatever it is.