In case you hoped getting to know what BBB rating really stands for, this is not the right post to find out. This one will give you an overview of this week‘s bond-concerned ongoings in the EU, ranging from madness regarding also the political situation in Belgium to various states emitting bonds in order to financing their budget.
For some its an abyss what’s happening right now in Belgium. Walloons and Flemish are conquering Iraq if it comes to days without government which already counts 221 in Belgium. Political instabiltity leads to financial instability as Belgian bond market experienced this week. Rating dropped from ”solid” to ”’negativ” this week. Yield rose, price fell, investors sold their shares despite knowledge that Belgium is amongst lowest scores if it comes to debt growth in European comparison.
If Belgium isn’t coping with its problems anytime soon, they will face a dramatic financial reaction to their political issues, as this informative blog post states. It will be a pity seeing this the country which has much more to offer than unconfident politicians and weed for everyone – legally. Follow Jeremy Clarkson to learn serious information about Belgium (*heavily coughing right now*) in this video and tell me what you think about Belgium.
Oh yes. There is no getting around. Bonds are and will be number one financial instrument to finance whole states – without alternative. (Reminding me of our Chancelor always stating that steps, taken by her, are “without alternative”). Of course there are alternatives, can you name some? However, following up on one of my latest blog post on the EFSF (European fund for shady financing, shady because some think it is Earth federation space force, hence having no idea what it European meaning is) I don’t want to withhold latest events:The fund shall now be used to buy Greek bonds.
Insanity or cunning investment? High rate of return: high risk. I guess Greece won’t be locked out from the EU because they…. I can not come up with any reason except the old statement that partners should stand up for each other. In this case stronger EU members. Still, will Greece’s economy fail? (links to one of my posts stating that 50% of Germany’s manager think 2011 is the year that 1 country will go down.)
Different from the situation in weed – and olive country is the one in France. Thanks to AAA rating, high expectations and a baguette for free for every bond sold (I made that one up but it’s a nice idea though), France was able to collect € 9bn with the aid of inflation safe bonds with different duration. 3y bonds were oversubscribed 5.4 times, another indicator for confidence in wine-fanatic country. (Consumption scored highest in Europe in 2008). Got the bond-data from this Friday’s (21/01) FTD print edition.
Bonds were, are and will be considered as high priority external financing instrument for first-world governments, all over the world.
Did I miss something? Tell me what you think anyways. Enjoy wine, baguette and good cars as long as they exist.