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View Full Version : German bond yields are now higher than UK!



sasguru
24th November 2011, 13:40
They've risen quite sharply today after yesterday's failed auction.

UK gilt yields below German bond yields show that the price of being in the Euro is rising | Mindful Money (http://www.mindfulmoney.co.uk/wp/shaun-richards/uk-gilt-yields-below-german-bond-yields-show-that-the-price-of-being-in-the-euro-is-rising/)

Investors are pricing in the risk of Germany (1) Bailing out the Euro or (2) Not bailing out the Euro.
Either way Germany will take a massive hit.

MarillionFan
24th November 2011, 13:53
Europe is speaking English again.

Take that Fritz

3-Nil!

sasguru
24th November 2011, 13:59
Europe is speaking English again.

Take that Fritz

3-Nil!

:laugh

I think the point is Germany vs UK is no contest, economy wise. Germany wins.
But Germany with the PIIGS weighing it down vs UK is also no contest. UK wins.

russell
24th November 2011, 14:01
Laughing at Europe's problems from the U.K. though is akin to someone on the titanic laughing at the Captain for hitting an Iceberg.

Hill Station Murthy
24th November 2011, 14:07
They've risen quite sharply today after yesterday's failed auction.

UK gilt yields below German bond yields show that the price of being in the Euro is rising | Mindful Money (http://www.mindfulmoney.co.uk/wp/shaun-richards/uk-gilt-yields-below-german-bond-yields-show-that-the-price-of-being-in-the-euro-is-rising/)

Investors are pricing in the risk of Germany (1) Bailing out the Euro or (2) Not bailing out the Euro.
Either way Germany will take a massive hit.

Yes,as I stated in my earlier post to the Not Another EU Meeting thread:


Well to be perfectly honest I think they have little choice but to convey the illusion of some kind of activity after yesterday's markets were roiled by tGermany's failed bond market.

I read in today's Telegraph that they yeilds on German 10 year bund is not higher than that of the UK 10 year gilt.

This must surely send a a message loud and clear that the writing is on the wall. The Germans must stop their bluffing game (for that is indeed what it is) and acquiesce to the demands of Mr. Barroso and accept that these Eurobands (or stability bonds as they have been rebranded) are the only way to give any chance to the long term survival of EMU.

As I mentioned in my post yesterday, the longer the Germans hold out with this bluffing gane, the greater the sweeteners they will demand for agreeing to be lender of last resort. This will mean more Germany not less Germany.

MarillionFan
24th November 2011, 14:08
Laughing at Europe's problems from the U.K. though is akin to someone on the titanic laughing at the Captain for hitting an Iceberg.

Depends if your getting in the lifeboat. :winker:

russell
24th November 2011, 14:11
Depends if your getting in the lifeboat. :winker:

Usually it women and children first, so you would be OK :winker:

Arturo Bassick
24th November 2011, 14:16
Can someone explain these bond yields to someone who knows "not a lot" about bonds? I always expect higher yields equates to better.

russell
24th November 2011, 14:19
Can someone explain these bond yields to someone who knows "not a lot" about bonds? I always expect higher yields equates to better.

Yield is the annual payment that the bond issuer needs to pay to holders of the bonds, so a country might issue 10 year bonds to raise money, if the yield was 3% then they need to pay 3% of the face value every year as well as paying back the face value on maturity. So higher is better for the holder but not the issuer.

Jeebo72
24th November 2011, 14:38
Usually it women and children first, so you would be OK :winker:

Two good posts in row... nice one.

BrilloPad
24th November 2011, 14:40
So those institutions who would have bought Bunds - what will they do with the money instead? London property?

Doggy Styles
24th November 2011, 14:54
So those institutions who would have bought Bunds - what will they do with the money instead? London property?Good news for house prices then?

Mich the Tester
24th November 2011, 14:57
So those institutions who would have bought Bunds - what will they do with the money instead? London property?

Eco-sheds.