Eurozone debt crisis

[Iron]

Political history shows extremism rises to the surface during depression. Hitler becoming leader of the Weimar Republic being a perfect example.

A further parallel with 30s Germany is that many people blame the mess on weak political leadership.

We're already at the point where the Italian and Greek PMs have been appointed by Germany. I imagine that they feel the same way about that as I would if the Germans decided that Lord Mandleson was going to take over as British PM...

Jeff

[superfrank]

We'll let's hope we do get some real political change where populations are listened to (instead of having failed social-liberal policies forced upon them).

A majority of people in the UK (both black and white incidentally) are opposed to any further immigration yet there is no mainstream political party that represents that view.

[Euler]

I see short german bonds have a -ve yield. Remarkable.

[superfrank]

have you got a link to live bond prices - I don't have them all in one place...

you don't get much for 2 years either!
http://www.marketwatch.com/investing/bo ... trycode=DE

[Euler]

I have CNBC on the background during the day.

[superfrank]

http://www.bloomberg.com/markets/rates- ... -bonds/us/

[Iron]

Sarkozy backs closer German ties - http://www.bbc.co.uk/news/world-europe-15991031

I can't help wondering if the United States of Europe is on its way...

The EU already has a great deal of say over domestic laws. And if you also have fiscal union, then what you have isn't that far off being a superstate...

Jeff

[superfrank]

Mystic Merv today...

He said: "There are many ways in which the future could play out. Maybe it [the eurozone] won't break up, maybe it will continue in various forms, but maybe there will still be questions of default."

On Wednesday, six central banks, including the Bank of England, took action to encourage lending between banks in order to keep the global economy moving.

But Sir Mervyn said that, "ultimately, governments will have to confront the underlying causes".

looks like they're preparing the ground for some big event (maybe Germany has had enough?) - an admission like this from a central bank governor would normally spell market turmoil, which makes me think that some massive printing has been promised to those in the know (to keep long stocks).

[Iron]

It does make you wonder...

Our Merv isn't usually one for Daily Express style hyperbole!

Jeff

[superfrank]

ECB's Draghi hints at robust action to help eurozone
http://www.bbc.co.uk/news/business-15981629

so Germany wants control over EZ nation budgets, and only then will they sanction the ECB to print.

'sounds like just another temporary fix to me... the fact remains that the PIIGS can't compete with Germany on a level playing field, never mind with their legs tied together. they should never have shared the same currency, simple as.

[Iron]

Merkel urges EU fiscal union to tackle eurozone crisis - http://www.bbc.co.uk/news/world-europe-15997784

[Euler]

Sweden Safer Than Germany as Crisis Upends Bond Market Logic

http://www.bloomberg.com/news/2011-12-0 ... logic.html

[superfrank]

makes perfect sense as Germany becomes much more of a risk if fiscal union goes ahead, and with the bondholders likely getting paid in freshly printed euros.

[staker72]

There are a lot of countries that are regarded as comparatively safe. However in normal times the big economies that borrow a lot have the advantage in that there is an ample supply of product for investors to buy and lots of knowledge about their circumstances which gives good liquidity. However it only takes a small number of investors to switch from a big market to a small one like Sweden's to disproportionately affect prices.
In racing markets it's the same. Big races with 7 figures matches act differently to those with a few thousand.
I wouldn't read too much into the spread although I think that one of the things that is squeezing the euro apart from doubts about default etc. is that the Euro is still relatively strong. (started at a bit below the dollar) so the smart money would be on it falling even if the crisis resolves (QE in some form or other?) so even a 6% yield isn't that tasty to long term non euro investors if the Euro drops by say 20% even before risk of default is factored in.

[superfrank]

good points.

it's now a currency war and the eurozone is losing because the idea of printing money is pretty abhorrent to Germany (very understandable with regards Weimar Republic history) but the FED and BoE seem to think it's the answer (or rather the only tool left). The ECB will print in the end, probably sooner rather than later according to recent reports (which is the reason for the latest stock market rally).