Thursday, July 5, 2012

Visual proof that the EU Summit #19 failed!





Don't listen to the rhetoric of politicians and academicians but rather look at the facts provided by the financial markets!

On July 1, two days after the euphoric end of the EU Summit in Brussels that saw stock markets rally around the world and bond yields for problem sovereign credits plunge, I wrote the following:

“…So on Friday the equity markets around Europe and in the US rallied sharply as did the bonds of some of the weaker EU sisters like Spain and Italy. But, even after the huge rally Friday the 10-year sovereign bond of Spain is still trading at the unsustainable level of a 6.32% yield down from over 6.90% Thursday and Italy's 10-year sovereign bond yield dropped to 5.82% from 6.20% Thursday.

So on Friday the equity markets around Europe and in the US rallied sharply as did the bonds of some of the weaker EU sisters like Spain and Italy. But, even after the huge rally Friday the 10-year sovereign bond of Spain is still trading at the unsustainable level of a 6.32% yield down from over 6.90% Thursday and Italy's 10-year sovereign bond yield dropped to 5.82% from 6.20% Thursday.

Strong performances to be sure, but if the outcome from the Summit was truly believed to be solving any structural problems and thus ensuring that there would be no future shocks such as the unthinkable one of countries being forced to withdraw from the EU, these yields would have come down much further…” (Source TPC)

Today, July 5th, the Spain 10-year sovereign bond that had been yielding as low as 6.25% this past Tuesday is now trading close to 6.80%. Similarly the Italian 10-year sovereign bond that was as low as 5.63% Tuesday is now trading close to 5.90%!

SPAIN 10-YEAR
ITALY 10-YEAR

In other words pay no attention to the man behind the curtain but listen to what the market participants are telling you that the real facts of the EU crisis are!

Bond information source, source
Picture source


Everything you'll need in case of an emergency!

WSJWine Wine of the Month12 bottles of world-class wine for only $69.99? Learn more about WSJwines here!

Gourmet Emergency Meals at the BEST Price - WiseFoodStorage.com

Buy Two, Get Two FREE 5-Gallon Bottles at HinckleySprings.com. Sign Up for Bottled Water Delivery Today!

No comments :

Post a Comment

;