Via Warren Mosler. No comment needed although I will add that I have talked to a few people based in Europe who told me that they were seeing a decent bid in Netherlands and German Bunds today. Regardless, I think the sentiments Warren passes along are representative of growing concerns in the region and explain exactly why we’re seeing the yields blowout in Belgium, France, Spain, etc:
I just received this.
Seems money managers with fiduciary responsibility are holding off on buying any euro member securities since the 50% Greek haircuts were announced.
Our Trading Desk reports “mayhem” in the AAA Eurozone markets
– France 11bps wider
– Netherlands 6bps wider
France now 178bps over Germany
Increasing talk/fear of Eurozone break up and capitulation trades in AAA markets are widespread.
We are seeing no real demand for anything – even Germany.
Tomorrow’s Shatz auction looks a big ask with a yield of 30bps and no risk appetite out there.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.