In the last 24 hours I have had conversations with a wide array of non-English European folks. Many I have known in the markets for 15 to 20 years. The common theme in all of the conversations, even the senior policy makers, was the acquiescent nature of the discourse. For over a decade I have […]

Let’s start with a few fun quotes from the weekend: Wolfganf Munchau – “The eurozone is maneuvering itself into a position where it confronts the choice between two alternatives considered “unimaginable”: fiscal union or break-up” Wolfgang Schaeuble - “We are not just defending a member state but our common currency” Brian Lucey, associate professor of […]

Spreads in the Euro-area “quasi-core” are cracking - 5yr French CDS has popped 25bps in the last 6 weeks taking it to a level higher than the Czech Republic and Qatar! And Italy is now funding at its highest spread levels since early 1997 (3 years before EMU kicked off). Italy now trades well above […]

Nope. I see no reason to get nervous about global systemic contagion risks from an EMU sovereign debt run. The markets are prepared for, and in many cases welcoming of, the news of EMU's demise. A run will very quickly bring relief that Europe has finally come to its senses and realized this Union is […]

There has never been good reason to believe the biggest debt violators of the Lisbon treaty would make good on their long term commitments. These countries do not have an inflation mechanism to rid themselves of their real debt burdens and the masses will throw out any politician that tries to force real austerity in […]

Wow. Ben steps up and delivers! There is no subtle innuendo in his Frankfurt speech, just brazen and downright aggressive warnings to major emerging market trading partners of the US. We wrote that something like this was behind the LSAP/QE2 policy in a commentary entitled "Translating Ben's Washington Post op-ed article". But we never thought […]

One of the nice things about being on the buy side for many years slinging bonds and currencies around is that your ex-salespeople always think you are coming back. As such, they keep you on all those distribution loops in hopes of some future sales credits. As I sifted through the comments from so many […]

I’m just back from 2 weeks in Asia and I’ve been asked to head right over to CNBC studios for a debate with Santelli and company on Fed policy efficacy. They seem to hate QE2 so it should be a fun one. The segment goes on just after 11am. We are putting the finishing touches […]

The surest sign that the Fed’s move to drive inflation expectations higher is working will NOT be most apparent in BEIs, 10yr Treasuries or even commodity prices. It will be outrage from top US trading partners in Asia and Europe that signals the policy is working. Well, from Wolfgang Schauble to Zhou Xiaochuan to Norman […]