Whose Debt Am I?
First the EFSF had trouble raising money. Then EIB spreads widened. Then EXPT got crushed. And now Germany struggled to raise money. Is there a realization that all the quasi-sovereign debt and supranational debt is actually someone’s debt? Is relying on implicit or explicit guarantees as a way to raise money indirectly over? Guarantees do […]
Time to sell HYG, JNK, and LQD
These ETF’s have performed well and are attracting assets at a good pace. That is all good news, and think these are still a great way to time the market, and I remain convinced that as the ETF’s evolve they can replace some of the much maligned (but incredibly liquid) CDX Indices. In the meantime, […]
Asset Swaps are adding to the Problem
Asset Swaps are adding to the Problem “Asset Swaps” make it more difficult for banks to sell Banks will often buy a fixed rate bond and enter into an interest rate swap to “effectively” turn it into a floating rate asset. It should come as no surprise that banks that rely the most on rolling […]
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 […]