We had the PIIGS from the eurozone crisis... The Economist tried minting SNIFD for the Nordics and their poor unemployment records (#1435777)
...and now we have the BIFs!...and now we have the BIFs!
The latest problem children of European debt markets, according to investors, are the “Bifs”: Britain, Italy and France. The three economies suffered the biggest rises in borrowing costs among major European bond markets following the outbreak of war in the Middle East on February 28.
debt sell-offs, and oil prices threatening inflation (ugh) in these countries specifically...
“If you don’t have the money in the first place, you are going to come under particular pressure,” said Craig Inches, head of rates and cash at Royal London Asset Management, who coined the Bif term, adding this had caused the trio to trade more as a group.
yeah, ugh, nobody is surprised about this for Museum Europe:
Europe, as the world’s largest developed-market energy importer, is widely seen as particularly vulnerable to the fallout from the Iran war, with the likely additional spending coming on top of huge debt issuance as a result of the coronavirus pandemic that had already driven countries’ long-term borrowing costs higher.
This conclusion is pretty fascinating... it's like bond/sovereign-risk pricing works once more:
archive: https://archive.md/uTINq
My economics education continues: what are the theories about why a war in Iran (which will presumably bring higher energy prices) cause a debt sell-off? For the people selling BIFs bonds, what are they buying instead?
I've been wondering, too. Best explanation is future inflation expectations (cuz these countries are heavily exposed to oil prices -> general prices up -> higher price level means lower real value of debt -> sell off)