Author Topic: Explain bonds(markets) to me  (Read 2430 times)

RuleNumberOne

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Re: Explain bonds(markets) to me
« Reply #20 on: August 09, 2019, 07:19:57 AM »
How would Germany tell its voters that you have to work and save in order to pay the pensions of retirees in Greece, Italy, Spain.

Fiscal consolidation will never happen. Can you get US voters to pay pensions of Mexican or Canadian government employees?

"one of the underpillars of the Maastricht Treaty was that completing successfully the project required fiscal consolidation."

this in my view will never happen, because Germany will not permit it. from Germany's (virulent anti-inflation) point of view, stagnation and receession are preferable
« Last Edit: August 09, 2019, 07:23:33 AM by RuleNumberOne »


RuleNumberOne

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Re: Explain bonds(markets) to me
« Reply #21 on: August 09, 2019, 07:23:11 AM »
Italy 10-year yields jumped 24bp in today to 1.77%.

Because Salvini is calling for new elections.

Italy needs to exit the Euro and end their humanitarian disaster. Debt to GDP higher than ever, 3 recessions in 10 years, 33% youth unemployment.

ECB and Eurocrats have a great lust for power and have created a big bond bubble just so that they can cling to power for some more time. Their pensions and savings need to be zeroed out and clawed back, just like they came after private sector banks in 2009.

cherzeca

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Re: Explain bonds(markets) to me
« Reply #22 on: August 09, 2019, 07:45:29 AM »
"Their pensions and savings need to be zeroed out and clawed back,"

this also will never happen imo.  the EU is fascinating since it is a (failing) social science experiment in real time.  all of the options that are calculated to remedy the inherent flaws of a single currency/separate credit issuers system will be beyond the pale for the EU bureaucrats...inasmuch as their jobs as EU bureaucrats require maintenance of status quo, on the one hand, and Germany on the other hand. things have gotten so extreme that the ECB has completely dominated the financial scene, which of course predictably has eliminated rational private actor price discovery (hence private actors doing something like buying negative interest rate sovereign bonds which is clearly irrational).  the EU credit market has become stalinist in certain ways (top down domineering, emperor wears no clothes).

this absurdity can last a long time however as I think the only way out is significant political turmoil, and if there is one thing the EU bureaucrats can do, it is bribe countries to quell this turmoil.

EDIT:  and the topper is that the next ECB chief will be a rank bureaucrat, a pol who looks at financial issues with political-colored glasses.  wonder how that goes?
« Last Edit: August 09, 2019, 08:40:27 AM by cherzeca »

scorpioncapital

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Re: Explain bonds(markets) to me
« Reply #23 on: August 11, 2019, 02:12:42 PM »
If the EU is united, then there is nothing wrong for germany to pay the pensions of other nations in part. just like in canada alberta sents 10 billion of transfer payments to slightly more bankrupt quebec...but europe is not na. each nation is extremely selfish although being part of the so called 'eu'. it is not really a union like the USA, or even canada...however i would say the eastern countries of the EU, the former communist countries are doing very well and actually are a very desirable place to live vs the western parts. it's not all one uniform bloc. these eastern additions to the EU that don't use the euro have reasonable inflation around 3 to 4% and are quite dynamic markets.