It’s Bullish

Not even the arrest of 1 of the globe's top plutocrats could effect the money market - interbank - rate structure. New low yields are printing as of this post. A dollar move of this magnitude had been associated with at least some marginal forward rate expectation of increase. Not this time , baby.

I would suggest a serious reading of Stan Druckenmiller's interview in the Weekend WSJ. The new Bond Vigilante's are longs. They are long because they are demanding credible medium term adjustments to the structural budget disaster. I recall Graham/Rudman well, this is a powerful force when widely held. Positive side-effects can become contagious.

For the short term, I am disgusted beyond belief. That the IMF chief could be accused of this behavior with the EU in this condition and Italy's Prime Minister already in scandal is mind numbing. Nero and Caligula would be proud. I have written already about the IMF rules for dues and headquarters location. China should make the payment and request the move to Beijing while this disgrace is being investigated.

The charade of European debt has been promulgated to avoid facing an obvious insolvency. This weekend we  learned that The Continent is both financially and morally BANKRUPT.

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