click for bigger chart
euro debt to GDP
Source: Bloomberg Briefs

 

 

Even as Europe’s stock markets start to awaken, their debt issues continue to worsen. But the correlation may not be significant — the Debt may get worse before it gets better.

Note the wide spread in debt amongst various countries — it is far from uniform.

From an investor’s perspective, the problem is if you wait for the debt problem to clear up, it may be way late for an investment. The bigger moves are made when the general consensus dislikes a given region or theme.

It is rather counter-intuitive, but often the best investable moments are when things look their bleakest.

 

Category: Investing, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Euro-Area Debt-to-GDP Ratio Still Rising”

  1. Hallsto says:

    Apparently Europe didn’t get the memo on intangible asset production accounting!

  2. capitalistic says:

    You can’t reduce debt significantly without increased economic activity…

    ~~~

    BR: Dont you mean DECREASE?

  3. dirge says:

    I’d be looking at non-euro countries adjacent to Greece: i.e. Macedonia is still really cheap and delightful, Greek business are fleeing to Bulgaria. With escape valves like that, jobs aren’t coming back to Greece any time soon. The other PIIGS have different challenges.
    E.g. Ireland will be dealing with their ghost-estate/banking problem for another 5+ years. The worst of it has yet to surface.

    Germany, Berlin specifically, seems ready to finally explode. It feels like SF in ’80s, just bigger. They’ve got to get their new airport working though.

  4. AtlasRocked says:

    I can’t find the before/after reference, BP. What is the basis of the % change?

  5. Gestalt says:

    And that is just government debt….I prefer to look at the total national debt including a nations precious financial institutions, corporate and household debt.

    Because as we have learned it’s not just gov’t debt that matters because household, corporate and financial sector debt can very quickly BECOME gov’t debt. And then all those bars can spike.

    McKinsey did a nice graph here:

    http://www.gestaltreality.com/wp-content/uploads/2012/06/Total-Debt-Country-Q2-2011.jpg

  6. DeDude says:

    It should not be called debt – it is “Failure to tax”. Rather than taxing the rich we have allowed them to hold pieces of paper called debt instruments. If “we the people” feel those instruments are to much compared to the GDP, then we should just take them back via appropriate taxation.