Tuesday's comedy capers
Just when you thought you were safe, a last minute move from our dear friends in the US are spoiling the party. Moody's lowered the outlook to"negative" for the AAA ratings of Germany, the Netherlands and Luxembourg (!). Yes,you read this well, even our friends over in Luxembourg - with only 3 government bond emissions totalling a mere EUR 5 bio or a 15% debt/GDP ratio - can no longer enjoy the sympathy from the credit rators.
And also, those with negative short term yields are now being put on negative watch, contrarian to what the majority of safe players are thinking right now. No, excuse me, not all, because some are being sheltered by our American friends. And with the exception of Norway/Sweden, those which are sheltered right now are engaged in programs of mass quantitative easing an/or of Anglo Saxon nature: US, UK, Switzerland, Japan, Denmark. So the message seems to be print and shore up government bonds or print and weaken your currency in order to retain your credit rating. And if you play by the books, you will get punished, ma-ke no mis-ta-ke.
Once upon a time in the Far West, just before it was won, a conversation took place in the small town of Centennial. And it was a pretty straightforward dialogue amongst cattle farmers :
Amos : "Jim, Pettis boys shot Nate Pearsons and Bufe Coker"
Jim : "I know"
Amos: "Jim, they were our friends"
Jim : "I'll get my gun"
Or may be I would advise our southern neighbors to dig up some inspiration from the following movie trailer