Monday, September 5, 2011

Merkel loses key vote, European stocks slammed and Greece 2-year bond yields reach 50%!

European markets get slammed on a variety of issues
  • Angela Merkel's ruling party loses state elections,
  • Concerns rise over whether any political will still exists to deal with the European sovereign debt crisis,
  • German stocks get slammed losing 5%,
  • The banking sector is particularly hard hit on the heals of the US decision Friday to investigate 17 of them. The cost to insure banks against default rises on institutions across Europe (CDS),
  • Greece 1-year bond yields 70% and 2-year yields 50% (sovereign debt yields across Europe in chart below),
  • Fears grow over the possibility for a European recession,
  • Key ruling in German courts due on Wednesday concerning whether the country can legally bail-out Greece, Ireland and Portugal.
Stock market indicators in the US show the probability for a very weak opening Tuesday morning!

Greece2 Year5 Year10 Year
Portugal2 Year5 Year10 Year
Ireland2 Year5 Year10 Year
Spain2 Year5 Year10 Year
Italy2 Year5 Year10 Year
Belgium2 Year5 Year10 Year
France2 Year5 Year10 Year
Germany2 Year5 Year10 Year

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