As we recently noted, thanks to the overwhelming dominance of the BoJ, the Japanese government bond market is "for all intent and purpose" dead [3]. As the chart below shows, that is the lesson that Europe has learned also. Since the Greek bailout, bond trading volumes (and thus liquidity) has collapsed to practically zero. Of course, this is ignored by the mainstream media, instead focusing on the 'low' yields of that nation's debt as indicative of 'recovery' around the corner and a market that knows better. Instead it is simply a measure of the domestic banks meager pricing at the margin of a bond market that reflects nothing but a shell of its former self. The pattern is similar (though not so terrible) for Spanish and Italian debt as the entire European bond market devolves into OMT-driven farce.
[4]
(h/t @fmirw)