Getting to the Point of No Return

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The FT’s Neil Hume quotes Harvinder Sian of the Royal Bank of Scotland:

Spain has entered the danger zone for yield levels. The chart below shows the yield moves in the constant maturity 10y paper for the GIIPS countries. These markets traded a range between 6 per cent and 7 per cent but ultimately this proved to be a pause before the move to higher yields then accelerated. There is no consistent yield trigger level inside this range but market talk of point-of-no-return around the 6 ½% is not without foundation either.

….The conditions for a near death experience for the Euro are in place now, which in turn should finally galvanise a more serious policy reaction. In the interim, risk assets can be crushed.

This is not, repeat not, a good time to be screwing around with the possibility of defaulting on U.S. debt. Repeat: not, not, not. It’s time for the Republican leadership to start facing reality and getting their troops in line. Playtime is over.

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FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

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