Tuesday, October 18, 2011

Sovereign yield spreads in Europe are a red flag in this latest rally.

Greek yields are at record highs.  Italy is getting back into dangerous territory as well.  Portugal is poised to become the next Greece in short order….and the new big tuna = French OATs.  At least on the bright side, Spain is looking better. 

While equity markets rally, sovereign spreads haven’t come down.  Why?