Noted by Mish:
Greek and Portuguese Euro-based sovereign debt yields hit new highs today with the Greek 10-Year sovereign bond yield topping 13% for the first time in the history of the Euro…
The Portuguese yield is at 9% – and if you go in to it further, you’ll see that investors believe there is a much higher chance of government default in Europe than a corporate default. The European Union is a financial house of cards, just waiting to collapse.
In case you’re wondering, “why should we care?”; the answer is that if the Euro collapses, it takes the global economy down with it – the three pillars of the global economy, right now, are the United States, the European Union and China…all three have massive, structural problems and no easy way out. China’s economy is overheating and various bubbles are already starting to pop (though given that the Chinese government can shoot you if you let the economic cat out of the bag, there is still the ability to believe that things are ok there); the United States economy labors under a mountain of debt and an absurd tax and regulatory regime which positively discourages wealth creation; Europe also has the mountain of debt and in addition to that the beginnings of a massive demographic decline.
This will get very ugly before it gets better.
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