Many have already pointed out the irony of UST yields making a most drastic upward move while QE2 (the second round of Fed asset purchases) is being implemented. In other words, as the Fed is buying UST bonds, their prices are falling impressively.  As can be seen in the chart, 10-year UST yields started a read more

Last weekend Europe took a step towards fixing a key structural problem underlying the euro: a future debt restructuring mechanism for insolvent members. Far from perfect, but a very decent effort nonetheless. It sets the stage for what could be an orderly debt restructuring (potentially avoiding an actual default) of a country’s debt if deemed read more

When we wrote “The euro is naked” on February 11 we were certainly bearish, but did not expect the euro to dictate all markets behavior even at high frequency. Watching the markets these days, it is fairly clear that the FX rate EUR/USD has become the barometer for the success of the euro bailout. We read more

The SEC claim on Goldman Sachs is no longer an aggregate risk to the market. Greece still is. The news last Friday about the SEC claim on Goldman Sachs had an effect on markets across the board. Today we are all more aware of the issues, the grey areas and the most likely scenarios for read more

There was an article in yesterdays’ Wall Street journal that questioned the idea that stocks are a better long term investment than bonds. Moreover, it pointed out the importance of other types of assets such as commodities. This is part of a broader debate on asset allocation, pushing away from stocks. Many of the ideas in read more

The Fed said they are prepared to buy US Treasuries outright, which is a policy action that can be analyzed from many angles, some more complicated than others. The bottom line is that it increases the probability that we end up paying for the current fiscal expansion and balance sheet problems through the inflation tax read more

This posting will be a short and fairly idiosyncratic note on Argentina’s debt management. Nothing more than that, maybe less… According to an article yesterday in Ambito Financiero, the Argentine government is about to get going on its financing needs for 2009. Apparently, a swap of ‘prestamos garantizados’ (PGs) for local debt linked to floating rate Badlar read more

As I said in my introductory newsletter issue (before switching to a blog format), traveling and spending time with the family is an integral part of this unemployment spell. This implies spending a few weeks in Argentina, which makes it difficult to avoid the local papers. I hope to return to non-Argentine issues in my next posting. read more