From The Wall St Journal:
By Neal Lipschutz
They may have retired in the U.S., but the bond vigilantes are alive and well in Europe.
The stunning lack of interest in Wednesday’s sale of 10-year German bonds shows the so-called fire walls incessantly talked about to contain the euro-zone sovereign debt crisis are nowhere to be found. Instead, the fire blazes out of control.
As reported, Germany was only able to sell 3.6 billion euros of a planned 6 billion euros in 10-year bunds, among the safest debt on the planet. Yields had been declining in Germany as institutional investors already are ditching the IOUs of just about every other European country. Wednesday, German yields rose.
If Germany, the strongest and safest European country, now has to struggle to finance itself, the two-year-old European sovereign debt crisis has reached a new and even more dangerous phase.....read on