Greece Rumor Mill Keeps on Turning
A flurry of rumors, none of them substantiated, has blown out yields on Greek bonds across the curve today, sparking worries yet again that the country will find itself unable to borrow at rates that can allow it to stay on firm financial footing.
The Greek 10-year yield breached the 7 percent mark and the spread between Germany’s borrowing costs and that of Greece hit its highest level since concern about Greece first surfaced at the start of this year.
Perhaps most importantly, despite the lack of corroboration of any of the rumors coursing through the market, investors on the short end of Greek borrowing are also getting very worried.
The six-month Greek note rose by an astounding 220 basis points today and the one-year note by 160 basis points. Clearly, the costs of borrowing for Greece right now are worrisomely high, especially given the fact that there is a plan in place to insure the country stays solvent.
For now, the markets here in the U.S. seem unconcerned about the goings-on in Greece, a decided contrast to the impact similar worries had earlier this year.
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