Thursday, February 18, 2010

An Equity Love Affair

You got to love the love story being played out in front of us. So romantic. Higher inflation, higher jobless claims, signs of stagflation, Greece bonds widening back out, and a never ending bid under equities. Add to that copper is flying again (25% in a week) as is oil and the entire economic complex seems like it has lost its marbles.

And as for the next crises coming to a newspaper near you, according to the UK Guardian Great Britian is continuing to rachet up deficits. From the article:

The British government has posted its worst borrowing figures on record for a January in another blow to Britain's attempts to reassure other countries it is not the next Greece or Spain.

Apparently this is the first deficit during the month of January, which is a tax friendly receipt month, since 1993. And the miss wasn't small.

The Office for National Statistics (ONS) said public sector net borrowing – the gap between the exchequer's tax-take and its spending – was £4.34bn compared with a repayment of £5.27bn a year earlier. The figure was also much worse than the £2.8bn repayment forecast in a Reuters poll by City analysts, who in previous months had largely underestimated the state of the public finances.

The yields on government bonds are starting to move up again as well. The 10 year is at 3.8% getting close to that magical 4.0%. Need another crises so yields go down so we can fund more large deficits. Isn't this pathetic.

1 comment:

themog said...

Not sure what is more insane. This market or my expectations that it may actually go down at some point.