Gs4 Security: Mortgage

Tuesday 18 December 2012

Mortgage

Ah, Europe. So it seems that Spain may request a bailout, or possibly just an open line of credit that Spanish officials hope not to have to actually use. According to Paul Vigna’s this morning the Spanish seem to hope that the backstop of a credit line would encourage investors to buy Spanish bonds. Or something like that. I find it fairly difficult to believe that once the credit line is opened that it will not be used. Spain is in a tough spot. Rajoy doesn’t want the IMF/EU/ECB to be able to dictate economic terms to Spain (where unemployment is already at an austerity-boosted 25% or so), but he needs money.If Spain requests the bailout or opens the credit line, I think the stock markets will rally (for at least a little while) and we could see some upward pressure on rates. Still at the end of the day (or week, or month), none of this solves the problems that exist in Europe. I think the ongoing uncertainty