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Re: Global disintegration

By: Cactus Flower in ALEA | Recommend this post (0)
Fri, 25 Nov 11 6:51 AM | 58 view(s)
Boardmark this board | The Trust Matrix 		Msg. 06330 of 54959
(This msg. is a reply to 06328 by Cactus Flower)
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Krugman reflects on the implications of German bond rates.

http://krugman.blogs.nytimes.com/

"The Apocalypse Trade

...So, the big story: German bonds are now being priced as a risky asset — what the FT calls the “apocalypse trade“. The interest rate on bunds, at 2.21% as I write this, is still very low by historical standards. But it’s above the rate on UK bonds (2.17%) and way above the rate on US bonds (1.88%).

The way to see this is that the market is in effect pricing in a real possibility of eurozone collapse.

In particular, market expectations seem to assume that the ECB will remain utterly indifferent to its responsibilities...."

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The above is a reply to the following message:
Global disintegration
By: Cactus Flower in ALEA
Thu, 24 Nov 11 3:34 AM 		Msg. 06328 of 54959

Well, this is now getting very ugly. http://www.cnbc.com/id/45418399

Believe me that however bad this ends up in the US, it is going to be a lot worse elsewhere. The US dollar is the world's most credible asset. Which is a burden as well as a blessing.

The Germans want a Euro, they say. But by refusing to permit eurobonds and a credible eurobank lender of last resort, they are dooming it; while hedging themselves against failure, they are more-or-less guaranteeing it for everyone.

At least there will always be music. http://www.youtube.com/watch?v=z3PYS8rV2to&feature=fvwp&NR=1

And poetry.

"This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper."

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