US Riskier Than Europe For First Time Since 2010; BofA Admits 'Good News Is Bad News'

Tyler Durden's picture

For the first time since early 2010, the risk of European investment grade credit is lower than that of the US. As BofA notes, recall that the European sovereign crisis escalated in the first part of 2010, as Greece had to be bailed out for the first time, and concerns spread to other countries in the periphery. However, that European spreads have now recovered - after trading at times more than 60bps weaker than US spreads - reflects more on differential technicals (flows) than fundamentals (reality). Credit spreads are currently driven mainly by technicals; this is not to say that technicals in the US credit market are not strong – they are – only that European technicals are stronger.



Furthermore, with now completely divergent central banks, BofAML believes that European technicals are going to remain stronger for longer. As they conclude, "relatively stronger US fundamentals lead to relatively weaker technicals," - or put another way "good news is bad news" for US credit markets...

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LawsofPhysics's picture

please, there is no "risk" when the government(owners) is holding a gun to the head of the middle class taxpayer in one hand and the other hand is running a printing press and buying/backing everything...


That's the fucking problem, no one is allowed to actually fail (except for the debt-slaves of course).

A society with debtor's prisons is nothing new folks.

DoChenRollingBearing's picture



All heavily indebted countries are about as risky as any other.

Be your own central bank!  Buy gold!  Guns & ammo, BTC, food & water, etc.

Monty Burns's picture

Not for the first time Laws you've hit the nail right on the head.

SAT 800's picture

Correction; that's a PREDICTION OF RISK. By people who are routinely completely wrong. No one knows "the risk"; it's in the future.

MWizard's picture

How to trade for 5 years without making any improvements?

ebworthen's picture

And the U.S. "good news" are marijuana brownies baked up by economic alchemists.

Remember 2007 when economists said there was no housing bubble and securitization and derivatives were "not a problem"?  Like that, with pundits lying, again, and again.  BTFATH!

Dr. Engali's picture

Fucking BoA has been wrong on everything else thus far, and I'm sure they will be proven wrong again. As long as Dragqueen and the BernakenYellenStein have control of the printing presses treasury yields will be contained.

Yen Cross's picture

  The BAC analysts have been spending too much time with "Uncle Warren" and his dementia is starting to rub off on them.

PontifexMaximus's picture

why don't you just believe it: Mario IS SuperFrankfurtMario, without even buying a single bond.....the London bunch is more happy with him than Cameron with Juncker. Probably DC has to learn his lesson or spend the night (again) with Angela...

farmboy's picture

Don t worry good news will not arrive the next 20 years

ejmoosa's picture

The rate of change and degradation in the US is accelerating relative to the rest of the world.


Just as POTUS has planned.

NoWayJose's picture

This just means that Draghi is better at fooling the people than Yellen is... for now...

Ghordius's picture

there is no comparison. One treathens the markets, the other preempts them. One is capturing banks, the other is commandeered by them

and yet China... is actually the biggest hidden player

SAT 800's picture

To paraphrase out famous .gov official; "Fuck China".