For the first time since 2006, Greek 10Y sovereign bond yields have plunged below 4.00%.
The last few weeks have seen a veritable rush to grab that yield as GGBs plunged from 5.50% on Dec 4th to 3.98% today!!
Of course, this "signal" from the bond market is being heralded as proof that the worst is over and everything is awesome in Greece again - hooray.
It"s Not!
Over 40% of youth (under 25) are still unemployed, suicide rates remains extremely elevated, emigration among the smart and young is prevalent, and of course there is the immigrant crisis that Greece appears to have become the main bearer of.
As The Guardian reports, a study by the DiaNeosis thinktank found that 15% of the population, or 1,647,703 people, in 2015 earned below the extreme poverty threshold. In 2009 that number did not exceed 2.2%. The net wealth of Greek households fell by a precipitous 40% in the same period, according to the Bank of Greece. Unemployment, austerity’s most pernicious effect, hovers around 22%, by far the highest in the EU, despite a 5% drop in the last two years.
Faith in government claims that the country has turned the corner – based on a massively manipulated bond market – is in short supply.
“Greeks can’t see any light at the end of any tunnel,” said Christodoulaki, shaking her head in disbelief. “They won’t believe anything at this point until they see it for real in front of their eyes.”
For those affected hardest by Greece’s bankruptcy ordeal, the Syriza government has been praised for providing food vouchers and rental subsidies, free school meals and hospital care for some 2.5 million uninsured.
“For the poorest of the poor Syriza has been good,” said Mourtidou.
“But it has not done what the vast majority hoped and that is very dangerous. Tsipras had a calming effect when he came along. There isn’t another Tsipras to promise us the world and now I fear the earth could be trembling under our feet. The next choice could be the far right.”
It is a common concern. Greeks have responded to loss with fortitude and resilience but a mood of uncertainty prevails. Amid the rage and disappointment many worry the power of loss could assume other more menacing forms.
“Uncertainty is the new normality,” psychology professor Fotini Tsalikoglou noted. “It could manifest itself in apathy, violence, more uncertainty, we just don’t know.”
