Indebtedness of Various Sovereigns

February 11, 2010 11:30am by Barry Ritholtz

Dylan Grice put out an informative piece this morning, titled Government hedonism and the next policy mistake.

A a few charts — and a quote — is what caught my eye. First, the quote:

“What you as the City of London have done for financial services, we as a government intend to do for the economy as a whole”
-Gordon Brown, Chancellor of the Exchequer, speech to bankers, Mansion House June 2002.

Truer words were never spoken. (Insert old joke here about political leader doing the same thing to country that he was doing to his mistress).

As to the charts, these two show the degree of indebtedness of various governments, as well as the gap between what these sovereigns need to stabilize their balance sheets:
>

Government off-balance sheet dwarfs on-balance sheet

click for larger charts

Difference between required and actual primary surplus (% of GDP)

Source:
Government hedonism and the next policy mistake
Dylan Grice, Global Strategy Team
Société Générale 11 February 2010
http://www.sgresearch.com/publication/en/19C05683D1CC9042C12576C7003152D1.pub

See also:
Niall Ferguson: A Greek crisis is coming to America (FT)
http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html

BN: Germany, France Demand Greek Budget Cuts in Talks Over EU Aid (Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEdRTib5Yo6U&

FT: Anger in Athens over tax rises (FT)
http://www.ft.com/cms/s/0/310d0c2e-166d-11df-bf44-00144feab49a.html

Aid Is Tough Sell in Germany (WSJ)
http://online.wsj.com/article/SB10001424052748703455804575057670849236994.html

Markets fragile amid confusion over Greek rescue deal (Telegraph)
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7208232/Markets-fragile-amid-confusion-over-Greek-rescue-deal.html

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client. References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers Please see disclosures here: https://ritholtzwealth.com/blog-disclosures/

twitter

facebook