The British perpetual bond (gilts) traded at the lowest yield in three centuries. That is correct: a reported transaction at the lowest yield in 300 years.
A growing number of economists are beginning to build the case for 1% yields on 10-Year Treasuries and 2% yields on 30-Year Treasuries. And Treasuries are already trading at record low yields.
The spread between German 10-Year bonds and French 10-Year bonds has widened to 100 basis points.
The spread between German 10-Year bonds and Spanish 10-Year bonds has widened to 500 basis points.
The spread between German 10-Year bonds and Greek 10-Year bonds is meaningless because the Greeks can’t pay, but it’s 3000 basis points.
What’s the point? Stay away from the bad guys.
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury