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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

Misery and sovereign ratings and Greece

Fitch strikes again. In a press conference this morning, David Riley, the rainmaker of sovereign ratings, said that Italy might lose its A+ status because of zero real GDP and ridiculously high borrowing costs (10-year bond yield at 7.15 – for comparison, German 10-year bunds are at 1.88). Riley also said that Fitch expected to downgrade Greece, from CCC to D as in… can you guess? Defaultread article

Today, Angela Merkel continues her meetings to save the world and sits down with Christine Lagarde of the IMF to gossip about/discuss the meeting with Sarkozy yesterday. read article

Outcomes of yesterday’s meeting was an agreement that the private sector needs to chip in to reduce Greek debt. Merkel stressed that the next bailout tranche won’t happen unless there is some obvious effort from the Greek side of things (in form of restructuring of the public finances). We’ve heard that quite a few times now and it seems like everybody is getting back in the Greece-might-be-leaving-the-euro mood. Lucas Papademons, Greek prime minister, actually admitted that Greece is risiking a disorderly default in March, unless there’s a new plan. It’s understandable [and maybe admirable] that Angela Merkel is still holding on to the European dream, but since the German magazine Der Spiegel got hold of an IMF memo saying the idea of resucing Greece had become obsolete, things look pretty gloomy again. read article

In terms of the Tobin tax, both, Sarkozy and Merkel, made statements about the importance of the tax and their oblivion towards David Cameron’s feelings about it.

Here an article from The Daily Reckoning, nicely outlining what’s wrong with the transaction tax in very few words.

Also, it’s essential to keep this chart in mind when talking about plans and projectionsview chart

And to end this thing on a happy note: the Economist’s Daily Chart does the misery indexview chart

So long.

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