Jim,
Looking at today’s bond spreads, the risk of sovereign debt has not gotten away despite government intervention. Markets can’t be fooled too long.
Best regards,
CIGA Christopher
Dear CIGA Christopher,
The real problem is what they are quoting here, which are OTC credit default swaps.
The underlying cause of all the problems, OTC derivatives, continues to grow and grow.
Regards,
Jim
European Bond Spreads
Tuesday, September 07, 2010
After the WSJ story last night on the European stress tests, here is an update on a few European bond spreads:
- The 10-year Ireland-to-Germany bond spread has risen to 376 bps. This spread is larger than during the financial crisis in May when the spread peaked at 306 bps.
- The 10-year Greece-to-Germany bond spread is now 946 bps, just below the peak level of 963 bps in May.
- The 10-year Portugal-to-Germany bond spread is now 351 bps, just above the peak in May of 349 bps.
Dear Eric,
This is the seed of market expectations for Currency Induced Cost Push Inflation.
When this, a currency event, takes place, many items now viewed bearishly will make new and surprising highs.
Regards,
Jim
The risky allure of copper
CIGA Eric
As fiat devaluation intensifies (as opposed to being driven by the global recovery), the price of copper and it’s on going risky thefts are certain to increase. Predominantly copper coinage, such as 95% copper pennies, is becoming increasingly scarce in circulation. Soon you’ll be lucky to find them as transactional change.
Copper theft peaked between 2006 and 2008, before the recession hit and prices plunged to less than a dollar a pound. As the economy recovers and the demand from China grows, the price is going up again, and is now hovering around US$3.40 a pound. Few new copper mines are popping up to boost production.
Source: nationalpost.com
