Debt Debt and more debt

If the Eurozone didn't have enough on it's plate with the Greek financial crisis, the rating agency Moody's has just downgraded Portugal and that will keep the prospect of contagion very much in Investor's minds.

As far as Greece is concerned, a number of European Banks are looking at ways in which they can restructure Greek sovereign debt, to give them more breathing space and this will keep banking shares negative in the short term. How the Greek government will push through the privatisation package is the next key step there.

And it isn't just Europe that is in trouble, the scale of US debt is truly staggering and Obama has called for urgent discussion to avoid the unthinkable prospect of a US default on it's obligations, if permission to borrow more is not given by August 2nd.

The US borrowing limit has been raised upwards whenever it has needed to do  so but has to be passed into law and just puts off the problem of servicing the massive US$14.3 tn loan total to another day. Obama wants to put spending cuts in place that will start to reduce the debt pile  but this needs the cooperation of both Republicans and Democrats and this isn't there at the moment.