To: carranza2 who wrote (83307 ) 11/17/2011 2:18:18 AM From: TobagoJack Read Replies (2) | Respond to of 218268 Europe seems intent on experimenting with diaper deflation as USA is insisting on trying hyper inflation. On average, in aggregate, events should work out, not too hot, not too cold, just warm. Just in in-tray The Crisis Eats Its Way Into The Core Yesterday was an unprecedented equal opportunity massacre in European sovereign debt markets. The crisis is now taking a massive turn for the worse, as more and more 'core' nations are infected by the self-feeding spiral of selling. Most notably, bond yields and CDS prices on France, Austria Slovenia and Belgium are blowing out at astonishing speed and Spain's yields have broken out to a new 14 year high (sound familiar? Last week it was Italy). To make matters worse, more and more CEE nations are succumbing as well, with Hungary in the forefront. The forint hits new lows against the euro, and yields are shooting up. The way the market prices CDS on France, it is no longer an AAA credit. If it gets downgraded, it is all over for the EFSF - it will be just as we said, DOA. Germany is essentially the last man standing at this point. Meanwhile, the eurocracy has managed to shoot itself into the foot in connection with the banks in myriad ways. By bullying and cajoling them, making up onerous new regulations and not keeping promises, it now has turned the banks into the biggest sellers of sovereign debt. The banks are clearly shrinking their asset base as rapidly as they can, contributing to the downward spiral. A massive credit crunch is only in its beginning stages. As far as euro area sovereign debt ex Germany goes, it's 'sold to you, Mario'. BuBa chief Jens Weidmann meanwhile remains adamant that the ECB will not intervene by printing money. A recent portrait of Weidmann in a German news magazine makes abundantly clear that he fears money printing will do more harm than good. If it ever happens, then only over his dead body, that much is certain. Full chart update included (you could call it pictures of a panic). acting-man.com