Newspapers cover page can sometimes send interesting contrarian buy or sell signals.
Can this cover page convince you that it's time for bonds? Source: Jim Bianco
French companies now borrow CHEAPER than the French state
€215bn of corporate bonds trade with lower spreads than government bonds - 18x more than in January. That's 38% of the IG market now pricing the government as the risk, not the companies. Source: Nic @puckrin Bloomberg
France's debt problem goes well beyond the public sector.
While government debt is comparable to US levels, France's private-sector debt burden is considerably higher. With both public and private balance sheets stretched, there is no easy way out. The question is how much political pain it will take to force the adjustment. Source: TME, Dhaval Joshi
France's debt crisis just hit its banks.
Just 6 weeks ago, insuring SocGen against default cost the same as Deutsche. Today it costs €16.5K more a year for every €10M insured. The extra interest France pays vs Germany is at its HIGHEST since the euro debt crisis 16 years ago. Can a sovereign crisis translate to a banking crisis? Source: Barchart
Nobody who lived through the PIGS debt crisis in the early 2010s would have predicted Greece to be a better credit than France in 2026.
France 10 year bond yield = 4.79% Greece 10 year bond yield = 4.43%
The shift from "PIIGS" to "FROGS" highlights a major reversal in European sovereign debt
The shift from "PIIGS" to "FROGS" highlights a major reversal in European sovereign debt, where former crisis-hit peripheral economies have stabilized while France has emerged as the new center of fiscal anxiety Source: Bloomberg
The S&P 500 (in orange) doesn't seem to worry about the spike of bond volatility - MOVE index (in blue - inverted)
Source: zerohedge
If you want fiscal dominance in a chart, here it is.
Below interest payments as a % of GDP for both the US government (blue) and US nonfinancial corporates (orange). Source. Jim Bianco, Lyn Alden on X
