The financial press has sprayed so much information about the Greek debt crisis that most investors have probably grown wary of the ongoing malaise. Greece will probably receive another bail-out until this phase of the cash-pile runs dry in 2012.
A Greek default seems imminent but the Europeans continue to delay the day of reckoning. Greek bonds effectively trade at busted levels or yielding 13.59% more than German ten-year bonds or bunds. And German bunds, long believed to be a safe-haven in Europe since the outbreak of the sovereign debt crisis in January 2010, are controversial because Germany is the single largest guarantor of deadbeats in the EUR periphery. That’s another story.
The next chapter of Western Europe’s financial crisis is about to unfold. And Germany can’t backstop the massive Italian bond market – easily Europe’s largest at a combined $2.3 trillion dollars and about three times bigger than Spain’s.