What was good for EU was always bad for Germany and what was good for Germany was bad for other EU countries. This could not have been more pronounced than yesterday Nov 23 2011 as Germany yields rose 11.3% and now are up another 4% for the day as Bond markets take a disliking to the German paper or rather the attitude. But what is interesting is that as the German yields rise, Italy and France continue to be falling in terms of spread. Is this why they say :Germany is the crux of the problem
If Germany is being clinically targeted, then Nov will be a month to remember as a month that brought back fear into the markets. We said on Nov 4, that markets are now going broke for Fear in Nov at a time when Markets had rallied hard in October which too was covered by us on Oct 2 and Oct 4 and Oct 8 articles.
Since the beginning of the Eurozone debt debacle, Germany benefited spectacularly from its reputation as safe haven. While yields were spiking in other Eurozone countries, German bond yields were dropping; and even 10-year bond yields dipped below the rate of inflation. So perhaps when it offered €6 billion in 10-year bonds at an average yield of 1.98%, a record low for auctions, it expected them to fly off the shelf. It was supposed to be a no brainer but has it stirred the hornets nest!!!
full article here: http://www.marketoracle.co.uk/Article31742.html
- Is it time for Germany to hit the panic button? by Brad Plumerat (prosumerzen.net)
- The Euro falling into a recession? (economist.com)
- Eurozone: Possible Scenario (politics.ie)
- EUROPE: Changing The Rules In The Middle Of The Game (businessinsider.com)