Greek financial crisis now considered contagion 'like ebola'
Since Greece鈥檚 2-year debt hit a new record-high yield of 26 percent stock markets around the world have been struggling. Likewise, the euro, now at about $1.3213, recently had its worse one-day decline against the dollar in about 12 months.
How bad is it really? According to Bloomberg:
鈥淭he yield on Greece鈥檚 two-year note has risen almost fivefold this month on concern euro-region support for the country will come too late to prevent a default. The yield soared almost 600 basis points at one stage today. Ireland鈥檚 jumped 90 basis points to 4.64 percent, Portugal鈥檚 increased 93 basis points to 6.24 percent and Spain鈥檚 rose 20 basis points to 2.26 percent.
鈥淐redit-default swaps on Greece, Portugal and Spain advanced to records, according to CMA DataVision. Contracts on Greece climbed 42 basis points to 865.5, Portugal jumped 20 to 406 and Spain increased 2 basis points to 211, CMA prices show.
鈥溾�橧t鈥檚 not a question of the danger of contagion. Contagion has already happened,鈥� Angel Gurria, secretary general for the Organization for Economic Cooperation and Development [OECD], said in a Bloomberg television interview today in Berlin. 鈥楾his is like Ebola. When you realize you have it you have to cut your leg off in order to survive.鈥欌��
It鈥檚 never been just Greece on the hot seat, but it is becoming increasingly clear that the situation no longer threatens to deteriorate the rest of the eurozone, it already is. As described above, Ireland, Portugal, and Spain continue to get punished for the error of Greek ways in addition, of course, to their own.
They are also being punished for the inability of the European Union to restore financial order鈥� before it鈥檚 time to 鈥渃ut [an EU] leg off in order to survive.鈥� When compared to the option of this ongoing and messy sovereign bailout, a state amputation could be just what the doctor ordered.
The full details are available in Bloomberg鈥檚 coverage of how .
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