Thursday, November 17, 2011
Yields Soar
Before US equities opened Tuesday, markets were roiled by soaring bond yields in Italy, Ireland, Spain, France, and Belgium. What’s this? I thought Ireland was fixed? I thought Spain was no problemo? And France; doesn’t it have an AAA rating? Belgium? Seriously; the contagion is spreading to Belgium now?
Mike Shedlock gives us a quick rundown here http://globaleconomicanalysis.blogspot.com/2011/11/sovereign-debt-yields-and-spreads-soar.html
The ECB, IMF, EMU, and EU are on the verge of multiple emergency meeting, if indeed meetings are not already underway. A quick check of the following bond spread tables and today's yield action will explain.
Across the board, yields and spreads widened significantly today. Note in particular the jump in the 2-year bond yield of Belgium. Also note the inverted spread situation for Belgium.
The spread to German 2-year bonds is 3.49 while the spread to 10-year bonds is 3.13.
Belgium has been off nearly everyone's radar, but not for long. The EFSF is underfunded for Spain and Portugal alone. It's now time to add Belgium to the major problem list.
On second thought, the major problem list now includes every country but Germany.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846
Larry Levin's Trading Advantage is a leading investment education firm that empowers traders to achieve and surpass their financial goals.More than 50,000 students have used Larry Levin's proven techniques for powerful results.
Mike Shedlock gives us a quick rundown here http://globaleconomicanalysis.blogspot.com/2011/11/sovereign-debt-yields-and-spreads-soar.html
The ECB, IMF, EMU, and EU are on the verge of multiple emergency meeting, if indeed meetings are not already underway. A quick check of the following bond spread tables and today's yield action will explain.
Across the board, yields and spreads widened significantly today. Note in particular the jump in the 2-year bond yield of Belgium. Also note the inverted spread situation for Belgium.
The spread to German 2-year bonds is 3.49 while the spread to 10-year bonds is 3.13.
Belgium has been off nearly everyone's radar, but not for long. The EFSF is underfunded for Spain and Portugal alone. It's now time to add Belgium to the major problem list.
On second thought, the major problem list now includes every country but Germany.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846
Larry Levin's Trading Advantage is a leading investment education firm that empowers traders to achieve and surpass their financial goals.More than 50,000 students have used Larry Levin's proven techniques for powerful results.
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