bonds

We are experiencing a European bond market crash. There’s not much time left. Make your trades now because a policy response is imminent; I’m thinking by Monday morning.

The European debt crisis is straining the Paris-Berlin axis, the pillar of EMU. French banks are heavily exposed to Italian debt, with some estimates putting public and private sector exposure at more than $400 bln at the end of H1 (without…

If you are still inclined to give Greece the benefit of the doubt, I suggest you study the works of Egan-Jones, a credit rating company located in Haverford, Pennsylvania. Contrary to most other rating companies, Egan-Jones does not receive…

The euro zone periphery was a sideshow. This stuff with Italy is the real deal. With yields at 6.7% and rising, it’s game over for the euro zone. The extend and pretend stuff ain’t gonna work.

If a central bank guarantees investors credibly that they can invest in certain debt instruments and not suffer principal or interest repayment risk, but only currency and inflation risk, some investors are almost definitely going to buy…

Last week we witnessed a flight to quality within the euro zone government bond market. The yield on 10-year German government bonds dropped a record 35 points last week. They now yield 1.82 percent. Meanwhile, the yield on 10-year Italian…

So what is the trade? If Italy continues to blow out and a big bazooka EFSF bailout fund is not attainable, the EU will be faced with certain death or massive ECB bond purchases. We think they will choose the later, which makes the Euro a…

One challenge investors and portfolio managers is achieving diversification. Impressionistic views gained from every day experience is confirmed by a number of academic studies. Diversification in the international capital markets is…

Last week we showed that government deficits lead to an equivalent amount of nongovernment savings. The nongovernment savings created will be held in claims on government. Normally, the nongovernment sector prefers to hold that much of that…

10-year Italian paper now trades at 6.17% and is poised to break through highs set in August. While the ECB and European leaders recognise that the ECB is the difference here, they are as yet unwilling to have the ECB declare itself…