Never mind debts in Greece or Italy, it’s France (or perhaps Spain)

This month France finally overtook Italy as the Continent’s biggest debtor – and the third biggest globally.

Next, take a look at who owns it. In Italy, 70pc of government debt is owned by the Italian banks, which swiftly pass it on to the ECB. 

Half of France’s debt is held by the rest of the world: indeed, since France is now the third biggest debtor in the world after the US and Japan, and since Japanese debt is also most owned domestically, French debt is arguably the second largest traded commodity in the world.

The problem is this. If French banks owned all that paper, arms could be twisted in a panic to support tthe price. But global institutions will ditch the notes at the first sign of trouble.

No French president has been re-elected since Jacques Chirac in 2002. 

Matthew Lynn telegraph26 April 2021

https://www.telegraph.co.uk/business/2021/04/26/never-mind-debts-greece-italy-france-heading-crisis/

France’s debt pile is surprisingly high 

But market watchers and economists don’t seem bothered. 

CNBC 7 Nay 2021

https://www.cnbc.com/2021/05/07/frances-debt-pile-is-surprisingly-high-but-experts-arent-worried.html

RE: My feeling is that things are not going well in Spain.

Spanish unemployment hits 4m for first time in 5 years

https://englundmacro.blogspot.com/2021/03/spanish-unemployment-hits-4m-for-first.html

“Stock valuations are elevated right now, and a lot of good news is priced in,” says Jeffrey Buchbinder, equity strategist at LPL Financial, to clients in a note. “However, we believe valuations are quite reasonable when considering interest rates are low and we expect inflation to remain largely contained.”

https://www.marketwatch.com/story/dont-bail-on-stocks-now-says-worlds-top-fund-manager-11619521285