Category Archives: Sovereign Risk

10-year Treasury Bond Rate At Key Resistance

Posted on November 15, 2010 by macromon

We’ve posted several pieces on the Treasury market about the bond’s positive technicals versus poor fundamentals.   The 10-year rate is now close to  piercing through key resistance at 2.83 percent.   It is difficult to fundamentally determine why rates are moving … Continue reading →

Posted in Black Swan Watch, Bonds, Credit, Equities, Fiscal Policy, Monetary Policy, Sovereign Risk | Tagged , , | 2 Comments

Greenspan: High US Deficits Could Spark Bond Crisis

Posted on November 14, 2010 by macromon

We are becoming more concerned that 2011 may be shaping up to be the year of the public debt crisis.  Greenspan seems to share those concerns.  The Hill writes, “Look, I think something equivalent to what Erskine Bowles and Alan … Continue reading →

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Merkel Blinks, Irish Bonds Rally

Posted on November 12, 2010 by macromon

The panic in the European periphery eased a but as Irish bonds rallied sharply after finance ministers issued a statement that current debt would not be included in burden sharing in the event of a sovereign restructuring.    The FT writes, … Continue reading →

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No Luck Be A Lady and The (Bad) Luck of the Irish

Posted on November 12, 2010 by macromon

The Irish are caught in the middle of panicky capital flows and the loose rhetoric of European leaders.   PM Brian Cowen tried to calm markets after comments from German Chancellor Angela Merkel suggested that not all national debt should be … Continue reading →

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Quote of the Day

Posted on November 10, 2010 by macromon

“Global imbalances lie at the heart of the current recession; failure to address them will abort recovery and lead to currency wars. Gold can play a minor part in the necessary rebalancing, as Mr Zoellick suggests – although history shows … Continue reading →

Posted in Bonds, China, Commodities, Fiscal Policy, Monetary Policy, Politics, Sovereign Risk | Tagged , , | Leave a comment

All Eyes on Portugal and U.S. Bond Auctions

Posted on November 9, 2010 by macromon

After a yield spike of 40 basis points since the launch of QE2 (see chart below), the U.S. is due to sell $16 BN in 30-year bonds tomorrow.  This is interesting in itself, but after a week of increased bond … Continue reading →

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Peru to Sell First 40-Year Bond

Posted on November 9, 2010 by macromon

Wow! Seems like just yesterday Peru’s hard currency debt was trading at 8 cents.  Actually, it was 1993.  Remember President Alberto Fujimora?   Bloomberg writes, Peru plans to sell 40-year debt in the international market for the first time as … Continue reading →

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Quote of the Day: “Although insolvent, Ireland is still liquid…”

Posted on November 8, 2010 by macromon

Morgan Kelly writes in today’s Irish Times, As a taxpayer, what does a bailout bill of €70 billion mean? It means that every cent of income tax that you pay for the next two to three years will go to … Continue reading →

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Chart of the Day: Sovereign Debt and Capital Flight

Posted on November 8, 2010 by macromon

We thought this to be a very informative chart, which shows the percentage of a country’s sovereign debt held by domestic and foreign residents.   In general, the more a country’s debt is held by foreigners the higher the risk of … Continue reading →

Posted in Black Swan Watch, Bonds, Commodities, Credit, Currency, Fiscal Policy, News, Policy, Sovereign Risk | Tagged , , | Leave a comment

QE2, Trade Deficits, and the G20

Posted on November 7, 2010 by macromon

Given next week is the G20 in Seoul and the U.S. is pressing to address trade balances,  we thought the following chart from the Congressional Research Service is quite timely.  Trade deficits are big drag on GDP (see chart below)  … Continue reading →

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