Greece’s finance minister recently told traders they would ‘lose their shirts’ betting against Greece.
The country is also reportedly very close to finalising negotiations with the IMF in regards to a 45 billion euro financial lifeline to help with an upcoming chunky 8.5 billion euro May 19th bond maturity date.
So then why are Greek bond yields absolutely exploding right now? The 10-year bond is yielding 9.32% right now according to Bloomberg data, which is far higher than it was trading last week even. The two-year has exploded to… get this… 12.55%. Just to lend Greece money for two years.
This is a financing crisis happening right now, right on the eve of a bailout. Which says it all. Clearly, traders believe the bailout won’t be enough. The bailout is just a short-term band-aid fix, and an expensive 45 billion euro one at that. This is painfully obvious based on the yield explosion right now.
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