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Italian 2Y Yields Drop Below 1% - Record Low
With record high unemployment at 12.3%, a banking system on life support, and a teetering-on-the-brink-of-recession GDP print; it only makes sense that on the heels of this morning's trip to the capital markets by Ireland, the other peripheral bond markets in Europe are well bid. But in context, at 99.6bps, Italian 2Y yields are now at all-time record lows - is everyone in the world front-running an ECB QE? EURUSD is back under 1.3600 and even Turkish 2Y notes tumble to a mere 10.02%.
Charts: Bloomberg
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hey why's Italy shaped like a boot?
- they couldn't fit all that shit in a shoe!
Am I right? LOL.
We Tu Lo....Print Moar!
no, italian debt really is a great investment...
/s
Corzine was just a little early with his bullish call on Italian bonds but clearly this shows he had his clients' best interests in mind when he stole their funds.
Draghi has killed the dragon spread at least for the time being...whats happening to the French spreads?
Do we see an acceleration of their spreads in anticipation of "triple dip" all cooked in Goodyear frenchified sauce?
US, EU, Japan all seeing a narrowing of interest spreads...coalescing ever lower...all based on infinite free money given from the governent to a few (QE, LTRO, etc.) allowing them to buy infinite debt yielding a nice risk free return (infinite return really) and the tax payers get to pay the interest to the few folks that were given the free money to begin with.
Bondzilla really was only a movie...no such creature exists in this world.
I don't know if I have the stomach to watch this game much longer...this is a world without consequence, bad governance, poor economic performance and fundamentals are rewarding with ever lower costs to re-finance.
Draghi wins. Can someone please shut Zerohedge down.
Ah a Marketwatch boy who just cant stay away...well of course this is where the truth is...and it hurts his little butt.
Nah, I don't even know what Marketwatch is.
I've always wondered how one "watches" something that doesn't really exist...
I remain long physical assets, sharecropping, and a dependable tribe.
ZH can stay rational longer than the EU can stay solvent.
Misallocation of capital in its finest form. EU peripheral bonds. Wonder when everyone in Europe gets the letter from their pension fund?
Dear future pensioner
"And it's gone"
Yours sincerely, your pension fund manager
Fact: anyone who lends money for negative return is retarded.
So, pretty much everyone with a 401k is a retard.
I wonder what the consequences of ripping off so many people will be?
Guess we'll find out...
tick tock motherfuckers...
MOAR cheap debt will do the trick.
It certainly seems so. After all, that's exactly what's been happening while the "shitstorm" quiets down. Debt was a problem, everyone agreed it was a problem, but nobody did anything about it. And here we are. I guess it wasn't a problem after all.
who knows, maybe draghi has already started printing. afterall, whats to stop him???
The US 2yr vs. the Italian 2yr or the Spanish 2yr yield spread (or the 10yr) has now compressed to ridiculous levels. How the fuck will these spreads not explode at the first hint of problems in these two PIIGS? Sure it could compress some more, but ultimately, I'm betting this spread will increase....a lot. Easiest trade of the year.
Widowmaker.
Not at these spreads and not if you minimize leverage.
Italy and Spain have been more than hinting at problems for ages and NADA.
Maybe a small trade size ....but I would be cautious calling it a sure thing or an ez trade.
It won't be the first time I've put on this trade, successfully. Thanks!
It's time the UK also rejoined this printfest
Did it ever leave?
It pays to have your own boy at ECB.
The ECB is going to end up injecting stimulus. Despite the Germans having a slightly more than healthy fear of inflation, no one wants to end like Japan and their years and years of crippling deflation.
Crippling deflation...aren't you well schooled in Bankster doctrine... Its utterly terrible for your money to buy more globally and locally each successive year and not be fiscally dragged into new tax bands by a banker/lobbyist controlled Rothschild government.
Must have inflation! Because if repeated enough everyone believes it is good.. just a wee bit of course.. unless we melt the bank system and need to refloat the propoerty market to bail out banks on Mark to market property book..
The trope that deflation = bad has been propagated by the banksters and their shills in the MSM. It means your money buys more stuff, FFS! The reason we're told that inflation and 'growth' are essential is that ponzi will collapse without them.
How fanastic is the ability to manipulate bonds?! How past generations who starved and suffered and died for lack of such must be lamenting their ignorance.
-In a world without money, fear would drive the interest rate up.
-In a world awash in money, fear drives the rate down.
-In a world flooded with money, when money has literally run out of other places to go, the rate goes down.
The problem, as I see it, is what happens if governments run out of reasons to incur debt, to overspend, when investors request bonds but there are none to issue? (like that could happen). Since this is not possible, then the end game is a totalitarian state where all are employed or funded by government. What else can it be?
Now ask yourself when the bond rates were at 7% for italy and 18% for Greece was that manipulation?
These markets are only interested in short term gains and act like shoals of sharks operating from HFT dark pools; unregulated and ZIRPED on cocaine.
It was manipulated then by mavericks as it is now to save the Titanic.
Next news will be 'ECB has been doing a virtual QE, and has decided to virtually TAPER. Low Italian rates spike'.
One author here at Zero Hedge does actually say the FED's QE feeds into the EU since half the US primary dealers are big EU banks.