Not sure whether the below chart, like a picture, is worth 1,000 words, but it says a lot about how quickly Latvia and Iceland have turned around their respective positions in international capital markets by taking swift action.
From The Economist:
More here.
From The Economist:
Latvia and Iceland successfully issued sovereign bonds at yields approaching Spain's last week. There are rumours that Dubai may follow suit. That the countries which started the sovereign debt crisis are returning to the market while peripheral euro-zone sovereigns continue to struggle has led to crowing from those who see austerity as a misguided strategy for Greece, Ireland and Portugal.
The lessons appear to be clear: devalue the currency and wallop foreign creditors to banks, state-owned enterprises and private citizens, honouring only the sovereign’s own obligations. Your reward will be an inversion in credit-default swaps:
More here.
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