Friday, November 26, 2010

Tensions Escalate in the Koreas and Europe, Spain Targetted

The world's tensions have signficantly escalated today, with North and South Korea at each other's throats, and the situation in Europe getting dire.

The Wall Street Journal reports that  things in Europe got worse as the "market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors' fears".

Of course, the Spanish Prime Minister dimissed the rumours and sadi there was absolutely no chance for a Spain bailout. But Ireland did the same just days before one was forced down their throats to save the foreign banks investments..

The WSJ says that his attempts to calm the markets had little effect, the euro is tumbling and the selloff in Spanish and Portuguese sovereign bonds is continuing.

"Sparking Friday's markets turmoil was a report in Friday's Financial Times Deutschland, which quoted unnamed German finance ministry officials as saying an aid package for Portugal would reduce the chances that Spain would also need a bailout.

The Portuguese and Spanish governments, the European Commission and Germany's finance ministry all denied the report, saying pressure wasn't being placed on Portugal to seek help. "It's absolutely, completely false—every reference for an aid plan for this country. It has neither been asked for and neither have we suggested it. It is absolutely false," said European Commission President Jose Manuel Barroso, a former Portuguese prime minister.

But the report still caused the euro to tumble against the dollar to $1.3252 from $1.3355 late in New York Thursday".

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