Working on the rule of thumb that approximately each one thousand feet of volcanic ash spewing from Iceland’s Grimsvotn volcano is equivalent to one basis point of government bond yields, it’s logical to conclude that Greek two-year yields at 25% today tower higher in the atmosphere. It is, however, harder to estimate which event outcome will affect the European economy more. Disruption to trade, air and passenger traffic last year after billowing ash clouds over shadowed Northern Europe have returned although they will eventually clear. The horizon might not clear in the event of a Greek default, 18 months in the making. Yields are softening once more as clouds of several varieties loom overhead.
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