Monthly Archives:

February 2012

Paying the locusts – what the PSI means for Greek bond investors

Early this morning it appears that at last Greece and the European authorities are at the final stages of  launching a bond swap with the private sector – known as the private sector involvement (PSI) procedure – which will aim to reduce Greece’s debt-to-GDP ratio to 120.5 percent by 2020 (currently 160 percent). The deal will receive blanket press coverage, we are going to focus on the PSI ele…

Read the article

4 Housing Markets, One Country

The Eurozone has become a very extreme example of the dangers inherent of creating a single currency area populated with a myriad of different countries and regions. There is little doubt that the right monetary policy for Germany is not necessarily the correct one for Portugal given the underlying structural differences and lack of fiscal coordination.

However, closer to home, there could be a…

Read the article


The big credit headline this week in the sterling bond world is that the UK gilt market has been put under review by one of the top three rating agencies Moody’s, for a downgrade from AAA to AA+. As bond investors in gilts and not politicians who love making sound bites, what does it really mean for the credit worthiness of gilts?

According to Moody’s European issuer-weighted default rate data …

Read the article

♥Mexico♥ – a rare ‘EM’ country that we love

I’ve always had a problem with the standard narrative that you hear about emerging markets (EM). Investors are constantly hearing, or telling, stories about how you must have exposure to EM because these countries have much stronger growth rates and prospects than the developed world, how EM countries have far superior demographics, or how EM countries have much lower public/debt to GDP ratios….

Read the article

Bond Vigilantes book – make a donation to support Cancer Research

To celebrate the 5th anniversary of the Bond Vigilantes blog, we’ve put together a book of 100 of our articles.  From the first signs of weakness in the US housing market through to the disaster of the European Financial Stability Facility, this is an honest record of what the team have been thinking through the most turbulent period in financial markets since the Great Depression.  You can als…

Read the article

Competitiveness confusion reigns supreme

Many question how the heavily indebted European nations will get out of the mess they are in. Absent a break-up of the single currency unit, most economists point to a significant reduction in unit labour costs (through a reduction in nominal wages) as the answer. In fact, Nicolas Sarkozy has stated that France has to bring down labour costs to improve its competitiveness like Germany did a dec…

Read the article