Yields And Momentum: Too Early To Buy Aggressively

Add France to the list of eurozone countries with negative short-term interest rates. The Wall Street Journal reports France Joins Germany to Sell T-Bills At Negative Yield France joined a handful of euro-zone countries Monday in selling short-term debt at negative interest rates as investors seek alternatives to expensive German and Dutch debt.

In the too stupid to make up category, Rajoy defends ‘victory’ for EU credibility Mariano Rajoy, the embattled Spanish prime minister, has defended the eurozone’s €100bn bailout for Spanish banks as a victory for European credibility.

Italy could issue its first 30-year benchmark bond in more than three years in 2013 after successfully selling a new 15-year bond this week, the head of the Debt Management Office said Wednesday. Rome, which has 2 trillion euros of public debt to refinance, shied away from selling longer-dated paper during the worst of the euro zone debt crisis, which pushed yields on its bonds and its borrowing costs higher across the curve.

By John Nyaradi: By John Nyaradi

Acts of Desperation Looking for the next major thing in Spain to blow sky high? I have a strong candidate in mind. Bank deposits are down 154 billion euros this year and banks have resorted to paying unsustainable interest rates as high as 8% to attract money.

Here is a note regarding capital flight in Spain and Greece that I received via email. Capital flight has intensified to record levels in Spain but interestingly leveled off in Greece. Capital flight from Greece is expected to resume when next reported given statements by the Greek president. The original source of this information appears to be Credit Suisse AG. Spanish private Sector Deposit numbers dropping at a faster rate

Just over two years ago I warned that Spain posed a significant threat to the EU area economies. This was a very popular stance, and since I'm more of a medium to long term strategist and Spain didn't experience any immediate pain, my stance was considered even more morose. Well, luckily, I supplied ample research to paying subscribers who were well prepared for what is now evidently coming down the pike.

Central bankers respond to every debt crisis as if they were all created equal. As such, they are willing to pile debt and promises upon debt and promises. In cyclical recessions the strategy eventually "works" using the term loosely. In reality, such kick-the-can strategies will eventually blow sky high, which is precisely where we are today, with Bernanke is scratching his ass, wondering why his policies are not working.