Fans of 2-yr swap spreads, which have been reliable coincident and leading indicators of systemic risk and economic and financial market health, will be pleased to know that the Cyprus bank deposit crisis has had only a very minor impact on swap spreads, both here and in the Eurozone. Message: not much to worry about here.
Just like in 2007
ReplyDeleteAnother canary. We still have a few more years of denial left before the true solvency problem becomes fully apparent and accepted. Until then, expect the CBs to throw more liquidity at the issues until a major entity/country finally admits "Houston, we have a problem".
ReplyDelete