Here’s a Seldom Discussed Fact: German-American Spreads Are Blowing Out

European QE is a perversion of modern finance, as evidenced by the widening, or blowing out to use Wall Street vernacular, of yields.

Case in point, back in October German bunds were yielding -0.15%, while the US 10yr yielded 1.55% for a spread of 170bps.

Today, however, after the seemingly endless reservoir of optimism over Trumpism and fiscal stimulus, bunds are yielding 0.37% and US 10yr 2.60%, for a spread of 223bps.

Makes sense? Why the fuck should it? It’s not like finance is a logical sandbox anymore. Instead, it’s just a bunch of emotions filled in with random occurrences that people backfit in order to create a narrative.

By definition, the widening of US-German spreads indicates the US is becoming a riskier place to invest. As such, Germany is afforded cheaper credit and can finance at much lower rates — all thanks and praise to the abomination of grotesque proportions called QE.