Politicians fail to grasp severity of Greek woes - Liontrust

European leaders still fail to see how quickly the Greek debt crisis could spiral out of control, says Liontrust Asset Management's Simon Thorp.

The head of fixed income says credit markets are assessing the potential peril more clearly. Interest rate yields on 10-year government bonds hit a record 7.2% yesterday, with Greece at one stage judged riskier than the Ukraine. Thorp says: "The politicians have tried to spoof the markets and say it is all okay with soundbites, but the market is not stupid. "It knows that the consequence of getting the recovery to where it is today has been a transfer of risk onto sovereign balance sheets. Markets know that is where the tail risk is now, and they want to know exactly how it will be...