The ECB bailout is not showing the same positive market response that other bailouts have shown. The bond vigilantes in Europe actually appear to be awake at the wheel. After briefly beating them into submission with the ECB bailout package the vigilantes are back with a vengeance. German 10 year yields have fallen dramatically since the bailout as Greek 10 year yields jump to 11.4%, Ireland’s 10 year jumps to 5.6% and Portugal’s 10 year jumps to 5.4%. All three are just shy of their pre-bailout highs. Unlike the USA, there really are bond vigilantes in Europe….
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.