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Sovereign debt crisis: Mother of all problems

It is important to cut through the market noise when attempting to analyze the causes of the eurozone debt crisis that has bedevilled the region for so long.

There is no shortage of analysis and commentary purporting to understand why the region is in the state it is, but Boaz Weinstein, hedge fund manager and founder of Saba Capital, has cut to the chase.

The key variables in this conundrum are the five-year CDS spreads of key eurozone countries and the percentage of their male population aged between 25 and 34 that still lives at home with their parents. The correlation between the two is striking.

Greece is the stand-out: almost 60% of that male demographic lives in the old family home, and of course we all know where Greek CDS stands. The next highest percentages of stay-at-homes are, in order: Portugal, Italy, Spain and Ireland. You get the picture.

Merkel and Sarkozy should stop wasting their time with summits and start running seminars on how to use a washing machine. But whatever happens, it is important to remember that whenever anything goes wrong, it is always your mother’s fault.

Five year CDS of Eurozone countries vs. percentage of men living with parents
Source: EuroStat, Bloomberg 
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