Two posts on the FT Alphaville blog caught my eye over the last few days.
The first included this diagram. The x-axis is government debt as a percentage of GDP, the y-axis is the annual budget deficit.
I don't know how much you're hearing about the situation in Greece, but the country's having a few funding issues with its national debt. Which (as you can see) is very large and growing very fast.
The markets are also getting nervous about Portugal, Ireland, Italy and Spain (the four countries are collectively known as the PIIGS).
There are a few others that look vulnerable - the UK is ratcheting up its national debt, and Belgium isn't looking great either.
The second post is that it sounds like the carry trade into the Australian dollar is unwinding.
http://ftalphaville.ft.com/blog/2010/02/05/142591/carry-trades-and-reverberations-down-under/
The problems in the Eurozone have caused investors to flee to the US as a safe haven. (I'm not convinced it's a clever idea.)
I think that both could have an impact on the functioning of the credit markets. The Eurozone problems could increase nervousness, and reduce bank lending.
Similarly, Economist said that the carry trade was helping support the Australian property market through providing capital. So if that unwinds, things could get tougher.
So neither is good news, but I don't believe that it's the end of the world just yet.
The first included this diagram. The x-axis is government debt as a percentage of GDP, the y-axis is the annual budget deficit.
I don't know how much you're hearing about the situation in Greece, but the country's having a few funding issues with its national debt. Which (as you can see) is very large and growing very fast.
The markets are also getting nervous about Portugal, Ireland, Italy and Spain (the four countries are collectively known as the PIIGS).
There are a few others that look vulnerable - the UK is ratcheting up its national debt, and Belgium isn't looking great either.
The second post is that it sounds like the carry trade into the Australian dollar is unwinding.
http://ftalphaville.ft.com/blog/2010/02/05/142591/carry-trades-and-reverberations-down-under/
The problems in the Eurozone have caused investors to flee to the US as a safe haven. (I'm not convinced it's a clever idea.)
I think that both could have an impact on the functioning of the credit markets. The Eurozone problems could increase nervousness, and reduce bank lending.
Similarly, Economist said that the carry trade was helping support the Australian property market through providing capital. So if that unwinds, things could get tougher.
So neither is good news, but I don't believe that it's the end of the world just yet.