Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (251788)	6/4/2010 9:34:11 AM
From: RetiredNow	Read Replies (1) \| Respond to of 306849

Hungary is the next Greece. That won't be good for Europe, Euros, nor the US stock market. Sovereign Credit-Default Swaps Surge on Hungarian Debt Crisis businessweek.com June 4 (Bloomberg) -- Credit-default swaps on sovereign bonds surged on speculation Europe’s debt crisis is worsening after Hungary said it’s in a “very grave situation” because a previous government lied about the state of the economy. The cost of insuring against losses Hungarian sovereign debt jumped 83.5 basis points to 391.5, according to CMA DataVision prices. Swaps on France, Austria, Belgium and Germany also rose, sending the Markit iTraxx SovX Western Europe Index of contracts on 15 governments 10 basis points higher to 163, and close to the all-time high of 167 on May 6. Hungary’s bonds fell after a spokesman for Prime Minister Viktor Orban said talk of a default is “not an exaggeration” because a previous administration “manipulated” figures. The country was bailed out with a 20 billion-euro ($24 billion) aid package from the European Union and International Monetary Fund in 2008. “The comments out of Hungary have really spooked the market,” said Rajeev Shah, a credit strategist at BNP Paribas SA in London. “Investors are interpreting it as bad sign for trying to tackle Europe’s debt crisis.” The euro dropped below $1.21 for the first time since April 2006, stocks tumbled and the cost of insuring against corporate default rose on speculation Hungary will weaken the EU’s willingness to rescue the region’s indebted nations. Swaps on Spanish government debt jumped 39.5 basis points to a record 295.5, according to CMA. Contracts on Portugal rose 37 to 376, Ireland was up 38 basis points at 298, and Italian swaps climbed 30 basis points to an all-time high of 264. Contracts on Greece rose 61 basis points at 787. ‘Something Serious’ The Markit iTraxx Crossover Index of swaps linked to 50 companies with mostly high-yield credit ratings jumped 21 basis point to 557, according to Markit Group Ltd. “Are we on the brink of something more serious?” Deutsche Bank AG strategist Jim Reid wrote in a note to clients today. “We’ve little doubt that the authorities have no appetite for imminent peripheral defaults but we do see the situation getting worse before it gets better. This leaves markets vulnerable until there is more certainty surrounding the structure of the peripheral funding bail-out.”