The European Commission said Monday that it wants Greece to explain how it used
complex financial deals that allegedly made its debt limits look lower. Greece's credibility is already under fire for falsifying statistics and hiding the extent of its deficits, which have triggered a debt crisis that threatens the euro currency union and has sent the euro sliding.
EU spokesman Amadeu Altafaj Tardio says the EU executive has given Greece an end-of-February deadline to give details on how the deals, called currency swaps, affected government accounts since 2001.
Here's what a currency swap is.
A currency swap is a foreign-exchange agreement between two parties to exchange aspects (namely the principal and/or interest payments) of a loan in one currency for equivalent aspects of an equal in net present value loan in another currency.
In this case, it's a way to mask your debt because the swap is used to pay off part of the debt. Meanwhile, Dubai World is back in the news.
If Dubai was floating a trial balloon with a rumored debt offer proposing a scant 60 cents on the dollar, it may have to think again.
Stock markets tumbled and bankers turned glum following a report that Dubai World was mulling offering creditors two options, neither one reassuring to investors already spooked by Dubai's debt debacle.
With President's Day, trading will be light. The Dow was off 45 points on Friday. The ten year U.S. Treasury bond is better this morning but only slightly after getting hurt on Friday. It's currently back below 3.70% at 3.69%. The yield spread between the two and ten year is again on the brink of breaking all time records at 2.86%. The three month t bill is steady at .086%.
Crude oil is steady at $74.13 a barrel and gold has pushed ahead of $1100 at $1100.50. The dollar is nearly unchanged this morning. It's up .01% against the Euro, up .06% against the British Pound and off .18% against the Japanese Yen.