Skip to comments.Francois Hollande has ten weeks to avert a French bond crisis
Posted on 05/06/2012 3:22:54 PM PDT by DeaconBenjamin
Fears of a Leftist lurch have been in the price for weeks.
The CAC-40 index of French stocks has underperformed Germanys DAX by 20pc since last August, an ominous divergence for two countries yoked so tightly together. The yield spread of German 10-year Bunds over French OAT bonds has jumped 90 basis points.
It reflects a gut feeling in global markets that France is sliding into deep trouble, clinging to a ruinously expensive social model in a Teutonic monetary union and a Chinese trading world.
French economists say the moment of danger will come later this summer - whoever is elected - as the full force of Europes contraction crisis hits France.
The country lacks the credibility to go for growth alone under the constraints of monetary union. It is trapped.
Star fund manager Edouard Carmignac makes much the same critique.If Hollande strays too far from virtue, French rates will go through the roof. France will not be able to borrow, he said.
My own view is slightly different. The German deflation regime is - in the current circumstances - the greater threat to Greco-Latin societies, and to post-War comity in Europe. Sometimes you have to go through a cathartic trauma to break free.
The worst of all worlds would be a nasty spat between Mr Hollande and Chancellor Angela Merkel that poisoned the atmosphere without bringing about any substantive change to Europes asphyxiation compact.
Watch the French debt auctions on May 3 and May 16 carefully, says Sophie van Straelen from the French hedge fund consultancy Asterias.
If they go well, a President Hollande may start to think that bond vigilantes will stomach his big state romanticism.
(Excerpt) Read more at telegraph.co.uk ...
France is cooked like an old snail. ECB will flood banks with currency to avoid bond crisis, but that’s about it.
Socialism is always fun until the bong hit wears off.
So any word they going surrender YET to debt crisis LOL!
Hey, they didn’t surrender to any debt crisis! They’re going to ignore it until their on their knees or worse.
And you've run out of "friends with weed."
As that old French proverb says-
“Hollandaise sauce for the goose, zut alors, she is cooked!”
France is about to test this out.
So the Germans will finally conquer the French by switching from bullets to bonds!
“And tax themselves into prosperity.”
Never ever worked..