{"id":5259,"date":"2012-05-17T05:47:39","date_gmt":"2012-05-17T09:47:39","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=5259"},"modified":"2018-09-21T02:04:22","modified_gmt":"2018-09-21T06:04:22","slug":"here-we-go-again-europe-crisis-regains-gravity-for-fixed-income-investors","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2012\/05\/17\/here-we-go-again-europe-crisis-regains-gravity-for-fixed-income-investors\/","title":{"rendered":"Here We Go Again: Europe Crisis Regains Gravity for Fixed-Income Investors"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Three months ago, I said that investors and journalists had largely moved on from <a title=\"European Sovereign Debt Crisis: Overview, Analysis, and Timeline of Major Events\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2011\/11\/21\/european-sovereign-debt-crisis-overview-analysis-and-timeline-of-major-events\/\">the European sovereign debt crisis<\/a>. Yet in the past month, the crisis has regained prominence in the forefront of the consciousness of pundits. Interestingly, most of the concern is arising not out of new events but rather out of the movement and consequences of the eurozone&#8217;s titanic debt. Although Europe is again the center of gravity for fixed-income investors, there are still many peripheral stories deserving of attention. Here then is a recap:<\/span><\/p>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>European Bedfellows.<\/strong> One source of the European sovereign debt crisis, in my opinion, is the incestuous relationship between Europe\u2019s businesses, banks, and nations. Because of intranational cross holdings of securities, it has been \u201cunited we stand, united we fall.\u201d Yet, there are reports that <a title=\"European Companies Pick Bonds for Finance | FT.com\" href=\"http:\/\/t.co\/0rPd9n3m\">European companies are starting to turn away from local banks and to markets to raise new capital<\/a>.<!--more--><\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>European Citizens Vote for the \u201cNew\u201d Old Order.<\/strong> Votes in Holland, Greece, and France indicated that finance has the capability of radicalizing the politics of nations with some citizens in Greece electing neo-Nazis to parliament. Beyond the election results\u00a0\u2014 which were widely covered\u00a0\u2014 is news about the willingness of eurozone countries to discuss economic growth, and not just austerity, as a way of exiting the global financial crisis. Meanwhile, the talk is of Greece leaving the eurozone and of Spain collapsing further.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>How Low Can Yields Go? <\/strong>Yields in so-called \u201csafe harbor\u201d sovereign debt keep falling as investors pile into these issues. The question has been: <a title=\"Investors Balk at German Auction | The Wall Street Journal\" href=\"http:\/\/t.co\/l0aiU93B\">How negative would yields have to go before investors balked at the notion that they were paying the government for the privilege of borrowing their money?<\/a> Debt auction buyers finally said \u201cnein\u201d in Germany. Meanwhile, <a title=\"US Investment-Grade Bond Flow Hits a Wall | International Financing Review \" href=\"http:\/\/www.ifre.com\/us-investment-grade-bond-flow-hits-a-wall\/21011794.article\">in the United States, buyers were reportedly tired of buying investment-grade credit<\/a>.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Chinese Yuan Rumblings. <\/strong>As I have been writing about for months, <a title=\"Change in China Hidden by Subtle Policy Shifts\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2012\/03\/06\/change-in-china-hidden-by-subtle-policy-shifts\/\">China wants the yuan to be a global currency<\/a>, and <a title=\"Floating Exchange Rate Promotes Yuan Internationalization\" href=\"http:\/\/t.co\/sBlJOTN4\">China is willing to make dramatic changes for the Yuan to be preeminent<\/a>. The latest sign is that <a title=\"More Steps Considered in Push to Open Yuan | The Wall Street Journal\" href=\"http:\/\/t.co\/fnSZJuxn\">Chinese corporations are going to be able to borrow yuan offshore for their business financing needs<\/a>.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Eliminating the Bond Market Middleman. <\/strong>Tired of investment banks making fat spread commissions for what is essentially information discovery, <a title=\"BlackRock's Street Shortcut | The Wall Street Journal\" href=\"http:\/\/t.co\/k3tFFkRj\">Blackrock announced it is going to create its own bond market trading platform<\/a>.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\"><em>Originally published on CFA Institute\u2019s \u00a0<a href=\"https:\/\/blogs.cfainstitute.org\/investor\/\">Enterprising Investor<\/a>.<\/em><\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Three months ago, I said that investors and journalists had largely moved on from the European sovereign debt crisis. Yet in the past month, the crisis has regained prominence in the forefront of the consciousness of pundits. Interestingly, most of the concern is arising not out of new events but rather out of the movement [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[73],"class_list":["post-5259","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-blog","tag-european-sovereign-debt-crisis"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=5259"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5259\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media\/5260"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=5259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=5259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=5259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}