As it has been discussed here many times in the past, the arbiter of safety and quality is not political rhetoric or temporary bursts of euphoria from the stock market.

The best indicator are the yields being demanded by bond investors to take on the risk of owning an entities debt. This is true whether the entity is a small corporation or a country.

As the charts below show, the yields for Eurozone sovereign debt being demanded by these fixed-income investors are in many cases at record highs, and if not at records they are very close as in the case of Greece.

The lone exception is the debt of Germany which is considered the safe-haven in the Eurozone.

Greece Parliamentary vote

There will undoubtably be some type of a compromise that will temporarily assuage the markets and result in some type of equity market rally as pundits will say something along the lines of "equity markets rally as fears of a Greece bond default subside."

For those looking for the true indication of investor comfort levels, however, look no further than the bond market!

Filed Under Conservative Musings

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