Mid-2011 Mish headline: shipping is down 15% vs. up 5%, holiday sales will be poor, possibly even down from last year.
Headline soon: Greece defaulted?! Who knew?
Well, everyone who understands such things knew, and here's what the end of the run-up to default looks like:
People buying Greek sovereign debt expect that they will NOT get all the money Greece is promising them. They demand a higher return on their investment. Today, you could buy a bond from Greece for $100 that would get you $163 one year from now if Greece didn't default. The market knows Greece will default and they will only get a fraction (if anything) of what they were promised, so they are charging WAY more interest. This is what they mean by "the market has priced in a default." (also from Mish)
No comments:
Post a Comment
I will review your comments prior to publishing them. Almost all comments are approved and published within a day or two. When you post a comment, Please bear in mind that you are addressing me personally. To be clear: I generally prefer clarity to agreement. Make your point, but be nice about it and don't annoy me, and you will likely see your comments published here.
Comment Moderation Statement