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Author: Alexander Gloy

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  • European Periphery on Fire

    Alexander Gloy

    Greek 10yr yields surge to 11.71% (from 11.35% a week ago) after reports of EUR 4bn deposits having left the Greek banking system in August. Greek 10yr government bond yield. Source: Bloomberg.com In the US it is illegal to call for a bank run, so all I am going to say is that if you…

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  • Pre-Labor Day stock market bounce not convincing

    Alexander Gloy

    Last week’s 6% bounce in the S&P 500 index was not convincing. There was no volume increase associated with the price increase (usually needed to confirm the uptrend). Source: StockCharts.com Many pundits were claiming the market “had” to go up since too many investors were bearish (pessimistic). But as John Hussmann (of Hussmann Funds) pointed…

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  • BoJ emergency meeting

    Alexander Gloy

    The BoJ (Bank of Japan) announced an emergency meeting for 5am GMT Thursday. According to rumors the recent strength in the Japanese Yen and falling share prices will force the BoJ into further “monetary easing” (read: printing money). Gold owners should rejoice – all major Central banks have now boarded the train of self-destruction. To…

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  • Irish crisis averted – for now

    Alexander Gloy

    Huge sigh of relief after Ireland managed to sell EUR 1.5bn fresh debt today (how much of that was bought by the ECB?). Irish CDS tightened 28bps to 275. Still, spreads are elevated, and it would be ludicrous to assume that more debt could cure an indebted nation. The European periphery had generally lower bond…

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  • European periphery on fire

    Alexander Gloy

    The European periphery is on fire. While German 10yr government bond yields declined to 2.33% (-0.06), Irish were unchanged at 5.31% and Greece widened to 10.67% (+0.19). Credit Default Swaps widened on Italy (from 130 to 200 within 2 weeks), Ireland (from 200 to 300) and of course basket-case Greece. Ireland will try to sell some…

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  • Any ideas?

    Alexander Gloy

    Source: Trussell & Trussell

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  • Friday 13th – predictions for the next 13 years:

    Alexander Gloy

    It’s Friday 13th, so here’s how things are going to pan out over the next 13 years: Greece is a tragedy. On May 7th they were already priced for a 30% haircut, and the banks prohibited it. So instead of dealing with EUR 210bn in debt (300bn *.7) they will be looking at 450bn in…

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  • ECB intervening in Irish Government Bonds?

    Alexander Gloy

    Stock markets falling word-wide, bond markets surging (prices up, yields down) – except a few outliers, like Ireland. Take a look at the intra-day yield of 10 year Irish government bonds; big rise, then sudden stop. Rumors of ECB having stepped in and buying Irish government bonds. To me, the chart looks like those rumors…

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  • What happened to the PIIGS?

    Alexander Gloy

    What happened to the PIIGS (Portugal, Ireland, Italy, Greece, Spain) – they have disappeared from the headlines recently, but there seems to be “life” coming back to bond spreads. Today 10yr spreads to Germany widened in France (+3bps), Italy (+7), Spain and Greece (+14 each). Credit Default Swaps for several countries and some of their…

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  • How much longer will stocks be able to ignore signals from the bond market?

    Alexander Gloy

    FOMC (Federal Open Market Committee) met today, announced the reinvestment of maturing mortgage-backed securities into longer-dated Treasury bonds (2-10yr). Fed language unchanged (“to keep interest rates low for an extended period”), but economic outlook a bit gloomier. Bonds rallied, with US 10yr yield down to 2.78%, but stocks closer lower. This is logical, as no…

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