At $450 billion, Norway has the world's second largest sovereign wealth fund. For the time being, that is.
It just snorted a considerable amount of Greek, Spanish, Italian, and Portuguese bonds and is down 3.4% on the trade.
Sadly, it's the government's pension fund.
With risk spreads versus German bunds above the May 10th EU bailout levels, Norway is willing to risk the financial welfare of its citizens in a half-baked bet that it will not only get repaid in full, but make a profit to boot.
This makes one wonder just what fiscal condition Norway is in if they need to take on this much risk in search of yield. It feels like a classic double down, all-in move.
“One could say we are investing for infinity,” Norway's Finance Minister Sigbjoern Johnsen said.
One could say they are investing for insanity as well.
For the full story, see Norway Buys Greek Debt as Sovereign Wealth Fund Sees No Default