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Yes, as well as this:
Jan 13 (CNBC) — The euro remained under pressure Tuesday despite the German government approving a second stimulus package worth $64 billion to help Europe’s largest economy.
Experts tell CNBC the rescue package is “irrelevant” and that the euro will remain under pressure ahead of the European Central Bank rate decision on Thursday.
It’s irrelevant regarding economic recovery, but can accelerate the rate of credit deterioration of the German state.
And the falling euro once again distorts USD exposure as a percentage of capital that is expressed in euros.
> On Tue, Jan 13, 2009 at 8:01 AM, Dave wrote:
> France and Italy under performing Germany 5
> bps today and Greece under performing 12 bps
> in 10yrs
by John Authers
Jan 12 (FT) – The market fears the Greeks, even when bearing gifts. It is also scared about the Irish and the Spanish.
Greece has always been treated as a peripheral eurozone member, not only in geography. Even before last year’s civil unrest, its bonds traded at a significantly higher yield than those of Germany – showing a higher perceived default risk.
A eurozone country defaulting and leaving the euro is close to an
unthinkable event. But Friday’s news from Standard & Poor’s that Greece and Ireland were on review for a possible downgrade, followed on Monday by Spain, left many thinking the unthinkable.
The spread of Greek bonds over German bunds is 2.32 percentage points, almost 10 times its level of two years ago. Spanish spreads on Monday rose above 90 for the first time. An Intrade prediction market future puts the odds on a current eurozone member leaving the euro by the end of next year at about 30 per cent.
And German default swaps cost nearly 10 times as much as they did not long ago as well.
The euro dropped more than 1 per cent against the dollar within minutes of the Spanish news, and is down 9.8 per cent in the last few weeks.
A crisis over Greece might be the euro’s ultimate “stress test” (to
borrow a phrase from Daniel Katzive of Credit Suisse). If the eurozone
could find a way to deal with a default, that might confirm the euro’s
status as the world’s next reserve currency.