By Peter Tchir. 2 year Spanish yield getting crushed. 60 bps in a day is big,
yet the market seems shockingly calm about it.
Europe is going to have to start using some EFSF money to
support the Spanish front end if the market isn’t going to take
another big leg down. For all the talk about 10 year bonds and
secondary market prices, getting the front end under control is
key. The EFSF 1% bonds of March 2014 are trading at 0.24%
(which seems rich), but Europe is either going to have to step
up and start using money to subsidize near term Spanish
issuance, or it the market will continue to deteriorate on
Guest post by Azizonomics.
Well, my intuition says one thing — the change in trajectory correlates very precisely with the end of the Bretton Woods system. My intuition says that that event was a seismic shift for wages, for gold, for oil, for trade. The data seems to support that — the end of the Bretton Woods system correlates beautifully to a rise in income inequality, a downward shift in total factor productivity, a huge upward swing in credit creation, the beginning of financialisation, the beginning of a new stage in globalisation, and a myriad of other things.
Some, including Peter Thiel and James Hamilton, have suggested that there is data to suggest that an oil shock may have been the catalyst that put us into a new trajectory.
Yesterday we once again spotted several “interesting” patterns in big names, where namely the Nat Gas algo dominated the trading pattern.
This specific Algo uncovered by our friends at Nanex, was explained last year.
Additional charts below.
Biderman on poltics and the need to change the constitution.
There seems to be little doubt that we need a new constitution, or at least a new way of governing ourselves. The response to my post July 4 rant that we need a constitutional convention was mostly positive. There were several who worried that a convention could get hijacked by nutcases but almost everybody seems to agree that what we have got now is not working.
Upon reflection, I think that we most certainly will be having some sort of new constitutional convention in the future. There are two ways it will happen. The first is as a result of our paternalistic government going bust in trying to provide everything to everybody. In essence we will be forced to start over; and hopefully a convention will be peaceful.