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Europe’s One-Time Bond Market Pariahs Now Locked in Race to 0%
Less than a decade ago, when Portugal stood at the brink of bankruptcy, its bond rate jumped above 18%. This week it yielded next to nothing. The rate dropped to as low as 0.001%, threatening to become the first 10-year bond in Europe’s periphery to break a key psychological barrier, despite the nation’s near-junk credit rating. The bonds of Spain, Italy and Greece -- which, together with Portugal, were the epicenter of Europe’s debt crisis -- aren’t far behind, as the pricing of financial risk diminishes from Europe’s government bond markets. Credit default swaps for sovereign debt in western Europe ... (full story)