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U.K. 10-year borrowing costs are now cheaper than those of Germany for the first time since...

U.K. 10-year borrowing costs are now cheaper than those of Germany for the first time since 2009, with gilts yielding 2.19% and bunds 2.21%. "Going, going..With German bunds yielding more than gilts, the euro crisis has moved into its final phase. Germany must act or it's game over," says Jeremy Warner.
Comments (5)
  • AndrewBaker
    , contributor
    Comments (2348) | Send Message
     
    When you can borrow at lower rates in the UK than you can in Germany, then there is something very very wrong! Germany itself has no problems internally, so the downgrade of its debt must be worry over other EuroZone countries bringing it down. Either hello again deutschmark, which won't happen, or goodbye Euro, which might. It's not a good time to be investing in EuroZone bonds right now.
    24 Nov 2011, 09:40 AM Reply Like
  • balois
    , contributor
    Comments (167) | Send Message
     
    As some analyst said, Germany is the first class passenger on the Euro Titanic. One way or the other, however, they will get out of the mess - eventually. Just sit back and then look at German assets.

     

    Sad to say, but, in contrast, the UK will not hack it. A gov busy window dressing, nationalized Ueberbanks, already high inflation, deficit, total debt (gov, private, biz), worse than the US, Japan, Eurozone countries. On the asset side of their balance sheet, they really have not that much to offer other than the City, with their house of derivative cards, flimsily veiled offshore tax havens, and dwindling North Sea oil/gas. Add to it an education system that is churning out a frightening mass of practically illiterate youngsters. God save the Queen.
    24 Nov 2011, 04:54 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (873) | Send Message
     
    Hussman thinks that ECB is not likely to act soon and the reasons are three:
    - legal issues: ECB is constrained by treaties that can't be changed that easily
    - inflation dangers, and
    - printing can solve the short-term liquidity problem but not the underlying solvency problem.
    Europeans as a whole have enough money to finance themselves if they wanted to but the Europeans themselves don't want to give money to insolvent European countries. They look for somebody more stupid like the Chinese or the Americans to do this.
    It feels like this is the endgame not only for Europe but for the global financial industry too. Two years ago when the US and other governments were socializing the losses of the financial sector by ballooning the national debts, I was asking myself: who will bail out the sovereigns? The answer was very easy: nobody. It was just a matter of time.
    24 Nov 2011, 11:19 AM Reply Like
  • moreofthesame
    , contributor
    Comments (743) | Send Message
     
    One day when eventually nobody may buy US bonds anymore both political parties will hail it as a success in curbing projected government debt.... ( I am kidding, sort of )
    24 Nov 2011, 03:02 PM Reply Like
  • marpy
    , contributor
    Comments (644) | Send Message
     
    like it or not, Germany's future is tied to the EEC and Germany (Merkel) is currently the stumbling block to the EEC solving its problems. The markets by cranking up German rates minimizing purchases of German bonds are telling Germany that it needs to be part of the solution and start listening to what the rest of the EEC is saying on Euro bonds and other means that can help solve the problem. If Germany does not listen, the market will be applying more pressure.
    24 Nov 2011, 10:15 PM Reply Like
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