This almost 30% decline in US yield is due to a combination of factors like expectations of more monetary easing by Fed,deflation worries and disappointing US economic data.In lockstep with the the US Treasury yields,the German bunds have also been rising.The rise in German Bunds is despite very strong German economic data.The German economy expanded at the fastest pace in 23 years on Rising Exports.So the fall in Bund yield is confusing when seen in terms of the US Treasury and Economy relationship
Germany which was a Reluctant Rescuer of Spain and Greece during the Greek Contagion has emerged as the surprise beneficiary of the crisis.The country’s economists and bankers were dead against the $1 trillion dollar bailout plan of the PIGS during the Sovereign Debt Crisis.However the Bailout went through and the Club Med countries are limping […]
The Spanish Financial sector is still in a precarious condition which is underscored by the record European Central Bank (ECB) borrowing . The indications of weaknesses in Spanish banking sector arose as Cajas were forced to merge or taken over by the Spanish Central Bank.These Cajas are considered the weakest spot due to their poor […]
The Spanish government which moved quickly to cut its Fiscal Deficit following the Greek crisis is now facing a major challenge from the Spanish Unions.The government has cut public sector salaries and is trying to reform the rigid labor laws.The hand of the government has been forced by the Ratings Cut and high yields on […]
A Chronology of the Greek Contagion 1) Markets get spooked by the Greek crisis ; IMF/EU Bailout deemed insufficient 2) European markets and risky assets take a might fall 3) Dow crashes 1000 points in 15 minutes 4) The European Bazooka is Unleashed with a lot of Fanfare;Merkel and Sarkozy declare “war” on speculators 5) […]
The last 2 weeks market gyrations have had their effect on the PIIGS. The rising interest rate on their bonds and the consequent effect on their economies is making the politicians sit up and take notice.While Merkel and Sarkozy the leaders of the 2 biggest EU countries play the “bad cop” routine of short squeezing […]