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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: smolejv@gmx.net who wrote (62749)	4/13/2010 4:48:38 PM
From: elmatador	Respond to of 219831

:-)

To: smolejv@gmx.net who wrote (62749)	11/12/2011 3:53:39 AM
From: elmatador	Respond to of 219831

Dolinar Janko Slovenia’s bond yields hit 7%. The eurozone storm is spreading fast and Slovenia has become the latest country to be battered by its winds. Its 10 year bond yields have jumped dramatically since the start of November and are now sitting dangerously close to 7 per cent. Slovenia’s spread over German debt also reached a record high of 535 basis points. Such yields haven’t been seen in Slovenia since it joined the eurozone in 2007 and their slide can be traced straight to Italy’s ongoing crisis. The move came as yields on Austrian 10 year bonds also jumped sharply on Friday, rising to 3.4 per cent from 2.7 per cent at the beginning of November. Other central and eastern European bonds were holding steady. Neil Shearing of Capital Economics told beyondbrics Slovenia was suffering from a “perfect storm” that can be blamed partly on domestic concerns but mostly upon Italy’s more serious problems. Yields on the 10 year bond breached 7 per cent on Friday morning before falling back to 6.97 per cent in the early afternoon. Slovenia has suffered at the hands of all of the major rating agencies: Fitch, Moody’s and S&P have all cut the country by one notch since the start of September due to concerns about its banking system and a lack of budget reforms. However, Shearing argues that its problems lie primarily in its close links to the Italian banking sector and to the Italian economy generally: “The initial trigger was the Italian crisis. Italian bank subsidiaries have been very active within Slovenia. Those banks went on a lending binge during the boom years” between 2006 and 2008. The concern now is that, as Italian banks suffer funding problems at home, they will have to pull in their horns, triggering a liquidity crisis in Slovenia. Shearing notes that Slovenia’s fiscal numbers aren’t that bad: “Its debt market is very small, government debt is only about 50 per cent of GDP and the country is running a deficit of only 5 per cent of GDP, albeit with not much growth in the economy. It is not Italy… the cost of any bailout would not be significant.” But Ljubljana may not take much comfort from the fact that the European Commission felt obliged to speak up in Slovenia’s defence on Friday. A Commission spokesman said, according to Reuters: “No, we are not worried. We consider that the Slovenian economy and Slovenian authorities will be able to face the current challenges.” Just the kind of endorsement every country hopes to avoid.