The Greek Haircut

posted 11/1/2011 in General

Market Commentary Highlights...
  • Despite all the headlines, yields for Italy, Spain, Portugal and Ireland's sovereign debt
    are at or below where they were in mid- July when the second rescue package for Greece was drafted.
  • While the second Greek rescue stemmed the decline in the sovereign bond market, as intended, stocks have plunged since then as investors increasingly priced in a greater "haircut" the banks may have to take on their Greek bond holdings.
  • The stock market's rise, despite no resolution on the terms of the comprehensive rescue package, appears tied in part to the increased clarity around limiting the amount of the haircut, lowering the odds of further bank failures and a 2008-style financial crisis.
View the entire economic Commentary (pdf format)

Lincoln Savings Bank and LSB Financial are pleased to provide the above Market Commentary for the week of October 24, 2011. The commentary is prepared by LPL FINANCIAL RESEARCH, the broker-dealer partner for Lincoln Savings Bank and LSB Financial. The above commentary and others like it can be found here.
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