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Europe Fears a Credit Squeeze as Investors Sell Bond Holdings
NYT ^ | 11/18/11 | NELSON D. SCHWARTZ and ERIC DASH

Posted on 11/19/2011 8:00:57 PM PST by Kartographer

Nervous investors around the globe are accelerating their exit from the debt of European governments and banks, increasing the risk of a credit squeeze that could set off a downward spiral.

Financial institutions are dumping their vast holdings of European government debt and spurning new bond issues by countries like Spain and Italy. And many have decided not to renew short-term loans to European banks, which are needed to finance day-to-day operations.

If this trend continues, it risks creating a vicious cycle of rising borrowing costs, deeper spending cuts and slowing growth, which is hard to get out of, especially as some European banks are having trouble meeting their financing needs.

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: canadian; dollar; economy; oil
It's a race to the bottom and it's a race where everyone loses.
1 posted on 11/19/2011 8:00:58 PM PST by Kartographer
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To: Kartographer

We’ve been hearing this kind of blather for so many years that I get vertigo every time this type of headline is posted. What a joke.


2 posted on 11/19/2011 8:09:11 PM PST by MeneMeneTekelUpharsin (Freedom is the freedom to discipline yourself so others don't have to do it for you.)
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To: Kartographer

When the investors sell these bonds,who’s stupid enough to buy them?


3 posted on 11/19/2011 8:11:16 PM PST by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: Kartographer

EU will implement rules to prevent the movement of Euros from weak nations to strong nations. Greeks have been moving their money from their own weak banks to the ones in Switzerland. Fearing the collapse of Greece and thus the repayment of recent EU bailout, the union is pressuring the Swiss banks to return the Greek accounts back to the Greek banks. Now Greeks are contemplating buying gold to preserve their wealth. The EU may be pressuring the Greek government to outlaw the ownership of gold. If well to do astute Greeks are trapped then they will join the rest of Greece in an armed revolt because the EU is basically mandating the end of their personal/family wealth and future. When you lose everything you lose it. This also bodes ill for Americans if our system is starting to collapse. Will the US gov prevent Americans from moving money overseas or outlaw the ownership of gold???? Desperate gov and institutions will break every promise to preserve themselves. Just look at MF Global.


4 posted on 11/19/2011 8:11:56 PM PST by Fee
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To: Kartographer

gosh, how can that be when those europeans are so-o-o

intelligent.

why, our comrade obama is following their socialist system.

/s


5 posted on 11/19/2011 8:12:20 PM PST by ken21
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To: Kartographer

This was already posted here a couple of hours ago.


6 posted on 11/19/2011 8:13:09 PM PST by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: MeneMeneTekelUpharsin

Slow moving train wreck, but a train wreck none the less. The Euro is screwed. Next up is the dollar.


7 posted on 11/19/2011 8:26:56 PM PST by jpsb
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To: Kartographer

This is a direct response to the actions of EU governments but the banks will be branded by the bad guys. same old same old.


8 posted on 11/19/2011 8:32:14 PM PST by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: Farmer Dean
"who’s stupid enough to buy them?"

Haven't heard of anyone missing an interest payment yet.

yitbos

9 posted on 11/19/2011 8:54:04 PM PST by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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