Various media analysts, such as the WSJ o BusinessInsider, reveal that something unusual is happening with US interest rates, although, truth be told, there is certainly no shortage of reasons for the financial system to behave in a strange and unprecedented manner. To put this into context, it is worth remembering that when an economy – as is currently the case with the US economy – achieves figures close to full employment and inflation close to the coveted 2%, its yield curve steepens. This is a logical consequence of the improving economic outlook, as in a scenario where a wealth of good business opportunities begins to emerge, it is normal for investors to demand higher returns in exchange for tying up their money in the long term, and lower returns on short-term maturities. The graphical result is a steeper slope in that currency’s yield curve, as has been seen countless times throughout history. (more…)
We’d like to recommend something for you to read at the weekend. It’s the article linked at the bottom of this post, written by 
About four years ago, the state of the European economies was so divergent that the markets were pricing in defaults across almost the entire periphery. Risk premiums were pushing half of Europe towards insolvency, and Germany was refusing to allow Draghi to flood the south of the continent with cash. The countdown to the break-up of the EU was underway, and 
Some of you may remember the article we published a little over two years ago entitled 
Banco Madrid is the first bank that the state and its regulators have let fall in this galloping debt crisis. In fact, technically speaking, it has not been allowed to fall, i.e. it has not fallen due to the absence of a bailout with state funds, as other insolvent institutions have been rescued in recent years, but rather, forceful measures have been taken to liquidate it due to its -still- alleged money laundering. What is paradoxical is therefore that the reason for the intervention and the swift liquidation of the institution is not, at least originally, due to the feared insolvency but to criminal practices of great significance.
With central banks and their QE, the debt situation in the developed world has reached a surrealistic level worthy of study. Not only because of the unprecedented size of the balance sheets of the FED, ECB, BoE, BoJ, SNB, etc., but above all because of the manipulation of accounts, which has become a macabre and dangerous norm.