The Sovereign Debt

The markets this week focused on “Sovereign Debt.” From an investor’s point of view, that’s primarily the bonds and associated debt instruments of European Countries. For the past month all eyes have been on Greece, this week the markets began to evaluate Spain.

Episode Segments:

The New Sub-Prime? In the first segment we listen to Bill Gross, the manager of the world’s largest bond fund, and therefore one of the biggest buyers of Sovereign Debt. Essentially, Nr. Gross sees the current market behavior as a re-definition of risk. These European Governments have taken on risk, as the economy has slowed. And the result of this additional debt load has all of the markets wondering whether a default is possible.
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The PIGS We take a look at Sovereign Debt from the point of view of the Europeans themselves. With an “on the ground” perspective, just how do they see the chances of a Spanish or Greek debt trouble. These week S&P lowered their rating on Spain to AA+, but most analysts feel that Spain will be able to manage their financial woes.
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This Week on Wall Street A look at the economic calendar, where there continues to be a mixed picture. Personal income, Productivity and even the unemployment rate, as report with adjustments, continue to point up. While construction spending, job cuts and consumer borrowing pointed down. Next week we get a look at the Treasury’s Budget, expected to be a big negative, and at Retail Sales for January with many looking for some king of rebound.
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