When the facts change, I change my mind. What do you do? -- John Maynard Keynes

Thursday, January 5, 2012

The Contagion of Denial

Despite Denial now evident on both sides of the Atlantic, the situation in Europe remains grim--

Debt crisis: Live - Telegraph: "Angus Campbell, Head of Sales at Capital Spreads, said:
The New Year party has come to an end as the same old concerns continued to riddle the markets with fears that it’s not just Europe’s sovereigns that are in bad shape, but it’s the banks as well, which could cause the existing European recession to be longer and deeper than is currently feared.On top of this a French bond auction saw the eurozone’s second biggest economy have to pay more interest fuelling fears that a credit rating downgrade will come sooner or later." (emphasis added)

Meanwhile, Italian 10 year bond yields rose above 7 percent:
Euro Crushed, European Bond Yields Rising, Dragging US Stocks Down - MarketBeat - WSJ: "Italy’s 10-year bond yield is up to 7.01%, according to Tradeweb. Spanish 10-year yields are up to 5.53%. French yields are up to 3.33%, and France struggled this morning to sell 10-year debt at auction. It paid about 3.3% on the debt, up from less than 3.2% a month ago. Central to the anxiety in Europe is Hungary, where the forint continues to tumble and borrowing costs continue to rise, and now Poland is suffering in sympathy, too. European banks, particularly in Austria, have exposure to both. This is dragging US stock futures lower, with Dow futures recently down 46, Nasdaq futures down nearly 7 and S&P futures off 6. Earlier, (US) futures nearly turned positive after better-than-expected jobs data. But the US economy is not an island. A euro-zone blowup would not be good news." (emphasis added)

Italian 10 year bond

The Big Picture

Financial Crisis - The Telegraph

JohnTheCrowd.com | The Sailing Website

Craig Newmark - craigconnects