bonds

I think it goes without saying that the problems for Spanish and Italian regional governments are due to the austerity-induced double dip recession those economies are suffering. The real insight here is that this municipal - double dip…

Two years ago I developed a thesis about the negative effect of the Federal Reserve's interest rate policies on bank balance sheets based on my understanding about the history of zero rates in Japan. For bank bond investors, this should be…

Moody's Investors Service has today downgraded Italy's government bond rating to Baa2 from A3. The outlook remains negative. Italy's Prime-2 short-term rating has not changed.

Last week's newsletter focused on Monti and Rajoy forcing Europe into true EuroTARP as the chief headline coming out of the latest European summit. A lot of other commentary focused on the agreement to let the ESM/EFSF buy up sovereign…

My view is that the euro zone sovereign debt crisis will end in a combination of monetisation, breakup or default. Let's review why.

The focus recently has all been on the Eurozone periphery, but signs of strained financial conditions are now showing up in German sovereign CDS. The spread has been steadily rising.

The US inflation indexed treasury curve (TIPS curve) has inverted sharply in the short end. The one-year TIPS yield went from negative 2.5% to zero in a matter of four months. The one-year treasury (nominal) yield on the other hand has held…

We are now in another existential crisis for the euro zone with yields on sovereign debt from Spain and Italy spiking well over 6%. We have been here before, most recently in November. Then, it was Italy in Spain's position as the lead…

On Twitter the latest buzz is about the US ten-year government bond hitting a record low of 1.6713%. Some are amazed that the world of 'financial repression' where long-term yields are lower than consumer price inflation can go on and on…

Spanish bond yields are spiking with no obvious reason to believe they will come down anytime soon. That puts the Spanish-German 10-year spread at an all time high.