French 10 year bonds yield twice as much as German bunds
I know spread to bunds is a more relevant measure but when German 10 year hit 1.745% and French 10 year yields hit 3.49% it was too hard to resist pointing out. Mr. Sarkozy’s reckless abandonment of fiscal prudence in any form is starting to have real consequences. I’m sure he won’t pause and change […]
Yawn…
A dull day all around. Stocks were weak all day with European sovereign debt struggling – Italy, Spain, France and Belgium were the focus with Spain hitting the 6% mark for 10-year bonds. France is interesting. At Bunds + 165 it is starting to look interesting. It is either way too cheap or this is […]
“Risk-On” Can’t Lose?
For the moment we appear to be in limbo, where stocks and other risk assets will rally no matter what? The view seems to be that if European sovereign debt improves, then risk will do well. There is little fear right now, as the assumption is that if sovereign debt does poorly, Germany will relent […]
(TEL) Europe Faces Toughest Hour Since Second World War, Says German Chancellor Angela Merkel
Somehow I think it’s good she didn’t say this on Veteran’s Day since what is going on doesn’t feel like war. It is mostly self-created and their “solutions” have made it worse, but it looks like they are preparing for the “final solution” of printing money. It seems that it has become way too emotional […]
99% Of The 1% Demand ECB Bond Purchases
Well, about 99% of the world’s bankers, politicians, and finance ministers are demanding that the ECB step up its purchases of sovereign debt. Basically anyone who will make money, gain power, retain their jobs, etc., has voiced their desire to see the ECB change the rules yet again, and grow their balance sheet to support […]
SOV CDS, EFSF, And The IIF
Much has been written about the impact of the IIF’s “voluntary” haircut program. I maintain that not only isn’t it a Credit Event, but it shouldn’t be one, because the banks are receiving something in return for doing it (or not having something taken away). One of the obvious consequences of the EU and IIF […]
(TEL) Eurozone Bail-Out Fund Has To Resort To Buying Its Own Debt
Simply bizarre. I assume by other “EU entities” the EIB bought some? This is really becoming Enronesque. Really is almost mind-boggling that they did this, and as far as I know, if it was a public new issue in the US where a company was buying it on the break (or putting in orders) it […]
In Flanders Fields by Dr. John McCrae on Remembrance Day
In Flanders fields the poppies blow Between the crosses, row on row, That mark our place; and in the sky The larks, still bravely singing, fly Scarce heard amid the guns below. We are the Dead. Short days ago We lived, felt dawn, saw sunset glow, Loved and were loved, and now we lie, In […]
(BN) Invisible Run on Banks Becomes Conversation With 7% Italy Yields
A good article. The Italian sovereign crisis is far from over, but look for people to shift back their focus on the banks. It won’t just be speculators, it will be investors that are afraid that having relied on political help to stay afloat (directly and via support for sovereign debt) you don’t know what […]
Merkozy’s Frankenstein
Whatever the European experiment once was, it has morphed almost beyond recognition. The policy responses have made the problem worse, not better, and it is becoming more complex. The contagion is spreading because every policy is linking the countries more closely, but not in a controlled and thoughtful way but in a haphazard poorly thought […]
