The Web Tycoon’s blog

After receiving pressure from everywhere Greece has surrendered even before than the expected. The Greek government has finally asked for the activation of the European mechanism of aid with collaboration of the International monetary fund (IMF), the fears of defaulting on the Greek economy decreased a bit and his risk prime of Greek debt at 10 years decreased from 578,6 basic points of difference with Germany to 560, by 3,4% less in just one day

The punishment continued for Portugal (from 190.6 to 190.4 basic points), and specially for Spain (from 88.78 to 91.9 basic points). The president of the Central German Bank, Axel Weber, Warned that many countries have excessive budget deficits, and for that reason “the risk has increased”.

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The beginning of the meetings with the European Union and the international monetary fund, didn’t prevent a new record on the price of defaulting insurances of Greek debt. The fears are getting bigger until the point of boosting the interest rate of the 10 years Greek debt to 8.28%, with 500 basic points of difference from Germany. Spain also increased the interest rate of hist debt to 80 basic points.

Investors of public debt are fairly opting to reduce its risk profile. The German debt becomes winner in a tendency that affect the surrounding markets.

credit default swaps (CDS) to 5 years of Greek debt also reached a new maximum of 489 basic points, what means that the cost of insurance $10milion grows to $489,000.

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