A Teutonic Shift: Europe's New Safe Haven

Tyler Durden's picture

Something rather notable appears to have changed in Europe in the last week. Since the global financial crisis exploded five years ago, each significant risk-flare has seen money flow rapidly into Swiss short-dated bonds (the so-called safe-haven trade) and has often driven these rates significantly negative. However, the current debacle is exhibiting a very different picture. Whether it is concern (as we noted here) that Switzerland will be next for a 'wealth tax' or simply a market's recognition of where the 'only' safe-haven truly exists in Europe, investors have surged into short-dated German Bunds (and not Swiss) - driving the yield on these bonds below Swiss 2Y.

Swiss 2Y Yield is -0.2bps, German 2Y Yield is -2bps!



Chart: Bloomberg

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Ahmeexnal's picture

Follow the money. Then you know who screwed you.

toys for tits's picture

So now it's official, the Eurozone's new name - Germany.

Wolferl's picture

Roman Empire 3.0. If you know what i mean.

hedgeless_horseman's picture



And the gold flows accordingly.

ACP's picture

Wasn't all this lawless bullshit the whole reason the mafia came into existence in Sicily/Italy?

Maybe it's time to organize...


flapdoodle's picture

Or perhaps



     Grossdeutsches Reich v2.0


thisandthat's picture

Gescheiterter (failed) Reich v4.0

iBuddhaTrader's picture

If I remember my history lessons half right, it think it was: Das Heilige Römische Reich Deutscher Nationen, they did not tell us about the 3.0 version at the time, well spotted.

drB's picture

The 3.0 version was Drittes Reich by Adolf - hence this has to be v. 4.0

Wolferl's picture

You forget about the Roman Empire founded by the Romans.

Stoploss's picture

investors have surged into short-dated German Bunds (and not Swiss)

There's your sign.



Passengers may want to return to their seats..

Rustysilver's picture

Passengers may want to return to their seats..


Passengers may want to look thru the windows and see which building the plane is aiming for.

localsavage's picture

Didn't they try this before?

alphamentalist's picture

I'd say they are doing a "better" job of it this time

Doubleguns's picture

Once they have all the money they will leave the Euro. Diabolical indeed.

walküre's picture

Why do you think investors are piling into Bunds? Their Bund holdings will get converted to Deutsch Mark and the investment remains intact.

Ahmeexnal's picture

Euro hyperinflation leading to pan-european war resulting in total destruction will make you reconsider your definition of "intact".

Cognitive Dissonance's picture

"Intact" is a relative term.

When everyone else is sleeping under the bridge your one room cardboard shack with a separate 5 gal bucket outhouse is a castle fit for a king.

walküre's picture

a shack built on German soil, with Russian cardboard and filled with Chinese trinkets

I've slept in worse conditions and come out alive.

ebear's picture

You lucky bastards!  No fancy Russian cardboard for me.  I have to live in a shoe box at the bottom of a lake!

GreatUncle's picture

You got indoor plumbing then and plenty of freshwater? Not bad that's a bonus.

akarc's picture

I see you have been to Mexico where a Dr. friend of mine drives an old junker for fear someone will think he has money.

Pseudo Anonym's picture

what money?  you mean judefetzen?

Once they have all the money they will leave the Euro.

Kirk2NCC1701's picture

Note to self: Keep cash account at DB. Wire funds in or out as required. Order a Bittburger and enjoy the show.

Gamma735's picture

This will be the German Anthem after they have all of Europe under their heel.




walküre's picture

Give it up, you're too stupid. Germany is OWED a cool trillion from TARGET FUCKING 2 !!!!

Ahmeexnal's picture

there used to be laws against usury in europe.
Time to bring them back and apply them against teutonic imperial kleptocrats.

walküre's picture

You're right. Germany should fucking leave the EUR and let the rest fight it out. Too bad that Germany is OWED a trillion in goods and services. Who ever thought that trading lemons and oranges for cars and machinery was a good idea?

If you owe the bank a million, you have a problem. If you owe the bank a billion, the bank has a problem.

Germany is THE BANK and has a problem.

akarc's picture

American lemmings could wake up and say, hey we have a problem here

schatzi's picture

Since we're all cozy with bullshit stereotypes, why don't you get off your arse and start working like the rest of us in the core instead of suckling on the Brussels teat.

See how easy that was?

Wake the fuck up and stop blaming others. If you you don't like what's happening to Greece, get on the street and throw your government out, then leave the € and the EU and we'll all be the happier. Otherwise pack your bags and come to the core. There's (still) plenty of jobs here and you're very welcome. Only prerequisite: prepared to work hard.

Silver Bug's picture

German Bunds safe? What?! Maybe in the short term, why beat around the push people, get in gold and silver now!



Jackagain's picture

Just got 200 silver Eagles delivered today...

Ahmeexnal's picture

You/d better have then assayed.

Groundhog Day's picture

damn these ppl are stupid.  Escape one place for another only to get screwed their.  Reminds me of the show walking dead.  Go online buy a few  100 oz gold bars and have them delivered.  thats a few hundred thousand right their

Mototard at Large's picture

With this sort of news and the ongoing crisis in Cyprus about to spread, I am curious that we have not seen discussion yet on derivatives and the threat they pose when things start to unwind. It is not clear to me how much exposure the big banks will eventually have, but my guess is that it may be significant. As with all things, time will tell.

LawsofPhysics's picture

Please, the same entities that hold those derivatives also get to decide whether or not a "credit event" has occurred.  Ergo, no such events will occur.  Talk about deleveraging, wait until these derivatives "evaporate" - annnnnndddd it's gone.

Panafrican Funktron Robot's picture

Indeed, if the derivatives are the WMD, then they'll induce everyone on earth to kill eachother via either conventional financial war, or financial terrorism.  Nukes hurt the powerful and pleb alike.  Why do you think the meme they keep pushing is "financial 9/11" rather than "financial armageddon"?  

lotusblue's picture

European bad soverign,bank and,corporate bonds pale in comparison to the DERRIVITIVES over there ! Look USA had thier momment to ENGORGE,why not the European ELITES ?


Mototard at Large,great point especially when ECB has collected a Pharling from proposed derrivitive tax.

SheepDog-One's picture

Just remember, 'all is well', until it suddenly isn't and then they just steal all your money some Sunday nite.

kato's picture

one of your recent guest writers mentioned the Crimean War as a reference, which was interesting. Also interesting from that period is that the revolutionns of the 1850's started in Switzerland. Would be interesting to see that author work on a connection to Switzerland, the causes of teh revolutions and the subsequent turbulence of that time.

CClarity's picture

Some want to move in Euros, which they need in their home country, cuz don't have confidence they'll be able to move Swiss Francs or exchange them for Euros in home country. The Slavic states have experienced this not so long ago and may opt for German safety in Euro over Swiss. Periphery mediterraneans may do same and move as much as they can out of local bank accounts.

The worst trader's picture

who is buying every dip no matter how small?

LawsofPhysics's picture

"85 billion per month, indefinitey" - Ben Bernanke

Panafrican Funktron Robot's picture

I keep feeling like this is merely an appetizer.  Imagine a couple of 2% down days!  We could be at $200 bln/month before we know it.

earleflorida's picture

'Benny and the jetFink's!'

Flaming Ferrari's picture

Looks like they are piling into the US stocks too........as soon as they open every morning.

gjp's picture

Safe havens such as AMZN, LNKD, CRM ... what could go wrong?

US masters of the universe wake up every morning, see yet another crack in the edifice of modern western captilism and think, I know what I should do, buy more vapourware companies at astronomical valuations.  These are sure to pay off in a crisis.  Brilliant stuff.