All Posts Tagged With: "default"

Let’s pause for a moment to reconsider what may have happened last week with Wall Street’s “trading glitch.” Is it possible that traders saw the cops beating protestors in the Streets and surmised this: No matter what deal European leaders come up with to bailout Greece, that deal isn’t going to fly on the streets of Athens.

Let’s leave off with the underlying economic debate about the resource rent tax and talk about the market. It’s getting shellacked. Our colleagues Kris Sayce and Alex Cowie are finding many of the positions they’ve recommend in their publications since the March lows are declining and hitting suggested trailing stop levels.

And now you get the feeling that policy makers only have a couple of bullets left in their gun to prevent a bigger panic in the market. Of course, maybe it just feels that way because of the drumbeat of coverage in the media.

The developed nations are over-extended, their debt levels are ballooning and their governments are creating copious amounts of money. Put simply, most industrialized nations are now caught between a rock and a hard place.

While Australians march down the path of a national house price obsession/mania, the world’s bond traders are firing warning shots. Bloomberg reports that, “Credit default swap (CDS) protection buying against sovereign debt default has spiked to five times the level of similar protection bought for corporate bonds, as the potential for a wave of sovereign debt defaults intensifies.”

Imagine how disappointed lenders will be when these loans default. And then, imagine how American investors will feel when a new wave of mortgage defaults and foreclosures is hits the commercial property market.