There is no free in liberty.


Wednesday, November 23, 2011

A Failed European Bond Auction ... in Germany...


Megan McArdle:

... a German bond auction went rather badly today.  In fact, a lot of commentators are using words like "disastrous".  They sold just over half of the €6 billion they had put out to market, the worst such outcome anyone can remember.  This comes on the heels of a Spanish debt auction in which the yields on their three month notes more than doubled to 5%.  That's a higher interest rate than I pay on my credit card.

I've seen three explanations offered for this:

  1. The market is pricing the euro, not German credit
  2. Bund yields, at 1.98%, are too low to be attractive
  3. European banks are deleveraging, depriving the auction of buyers
#2 is actually just a special case of #1--people used to like to buy ultra-low bunds as a safe-haven, and now they don't.

And local Keynesian, Brad Miller, unable to learn from the failure of others, follows in European footsteps.

 Let's look at what he said upon the failure of a special bipartisan supercommittee to reach an agreement on cutting at least $1.2 trillion from federal deficits.

Brad Miller via The Charlotte Observer:

"I didn't think they would do anything to put their political careers at risk," Rep. Brad Miller, D-N.C, of Raleigh, said of Republicans. He blamed the GOP for failing to consider increased taxes on wealthy Americans.
Like Europe Brad  Miller rejects the necessary  austerity in favor of  shifting private sector wealth to federal spending.

Socialists never learn.


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