Warning Shots

I look for little things that could mean very big things in the future. The scent of trouble. Sometimes it develops and sometimes it doesn't. Today there were two things that caught my eye that smelled of potential trouble though they don't reek as of yet.

First was the the U.K. Bond Auction Failure.

The U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.

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“This is a warning signal investors are sending to the government,” said Neil Mackinnon, chief economist at hedge fund ECU Group Plc in London, who helps manage about $1 billion in assets and is a former U.K. Treasury official. “Investors are giving the thumbs down to the gilt market.”

The second piece of news that caught my eye was the ousting of the Czech government in Eastern Europe. This weakened the Koruna and creates uncertainty once again.

The rally in the Czech Koruna, Europe’s best performing currency in the past month, may crumble after Prime Minister Mirek Topolanek lost a vote in Parliament, ousting his government.

The Koruna weakened as much as 0.6 percent to 27.300 per euro today, eroding its 5.8 percent gain in the month since Feb. 24, and dropped 3.1 percent against the dollar in the past two days, the biggest decline in emerging-market currencies.