TIMES of DANZIG
Established 1862. Dedicated to freedom of press since.
Established 1862. Dedicated to freedom of press since.
Financial markets unsettled by Talemantros, debt position `weak', `deteriorating situation nigh'
Danzig, 04.08.2010 - It is the story nobody wants to talk about, but it does happen and it plays a major role in what is driving financial markets these days. The funamental weaknesses of the Talemantric economy and the inability of the Talemantric government to resolve the ongoing crisis with its neighbor Carentania. Markets cannot speculate against the communist regime in Carentania but they can against Talemantros. Government finances have been under pressure for a long time but when the threat of conflict looms ever closer, it is apparent that their budget deficit will grow larger to counteract Carenanian arms build-up. An arms race between Carentania and Talemantros would be devastating for Talemantros as their economy, still recovering from one of the many crises that hit the world in the last decade, is shaky and on unstable soil.
Financial markets are openly asking the question if Talemantros remains able to commit itself to its obligations. Fiscal auserity measures aren't pushed through by parliament and the private sector, especially manufacturing, is suffering from low wage countries like Hajr and Oikawa. Worries about Talemantros have been around for longer than today but today marked a turning point. For the first time in decades, spreads on Talemantros debt crept past the 250 basis points above Danzig 10 year notes, the benchmark government bond. A 200 basis point rise happens if you compare it to emerging markets. But 250 basis points means financial markets view Talemantros as a bigger risk than say, Oikawa. A situation that will deteriorate rapidly and will eventually a self-feeding spiral may be the end result. Also today saw a rapid rise in bets against Talemantros. Financial markets could not shrug off the news and markets closed lower across the board. Analysts fear the tipping point for bets against Talemantric assets may come `very soon' and will `severely disrupt markets across the globe.'