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Saturday, November 27, 2010

Fears about Portugal and Spain Grow

Portugal and Spain may need to join Ireland and Greece pursuing bailout money from the EU.  Friday bond holders dumped Portuguese and Spanish bonds in a panicked selling due to fears both countries will be forced to pursue bailouts.  It has been talked about for weeks that if Spain has to get bailed out, it could signal the end of the Euro and potentially the Eurpean Union. 
The draining confidence in Western Europe's weakest economies threatened to upend bond markets, destabilize the euro and drag out the global economic recovery if it is not quickly contained. 
The perceived risk caused rates at which the two countries can borrow near record highs.  This could cause a snowball effect making recovery more difficult for them.  [Read More...]

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