Sovereign Debt ConcernsIn July, sovereign debt issues again took center stage.
For months, fears of Greece defaulting on its debt and triggering a series of dominoes have hung over the market. After some jitters in the first half of the month, a plan was finally put in place to exchange much of the Greek debt for longer maturity (15-30 year) debt. This seems to have resolved the situation, at least for now, and sparked a short-lived relief rally.
Meanwhile, on the home front, the possibility of default on our own debt continued to increase. Lacking an increase in our debt ceiling, the government has been short of funds since May. However, it has managed to finesse the situation with the use of smoke and mirrors. August 2 is the supposed date when it would no longer be possible to keep up the charade. Faced with the possibility of