Euro Update: Bond spreads widen

I just got back from a business trip to Europe, and I heard a lot of confirming evidence that the Euro is headed for serious trouble. I think that this also means that Switzerland is headed for serious trouble, because like Iceland, its finance sector is too large compared to its GDP; and without the Euro to flee to, a collapse might occur.

Here's the Bloomberg article via Clusterstock on BlackRock betting that the Euro will stay together.

Prices now reflect odds of between 10 percent and 20 percent that the euro-region will disintegrate following a series of credit downgrades from Standard & Poor’s this month, according to BlackRock. The difference in yields, or spreads, between the three nation’s 10-year bonds and those of benchmark German securities was close to the widest today since the euro’s debut in 1999.

“You have got to ask yourself at what point this becomes ridiculous,” Scott Thiel, head of European fixed income in London at BlackRock, which manages $1.3 trillion, said in an interview Jan. 23.

Actually I have to ask myself when it becomes inevitable, Scott.

That would be the BlackRock whose stock has fallen from 249 to today's 109, BTW.