Bond Outlook by bridport & cie, August 24 2011

Euro zone politicians are failing to provide leadership and solve the key issues. What is worse, is that they do not even have the structures to address them.

When politicians fail to lead, or even to grasp the problem, never mind coming to grips with sustainable solutions, what happens? The first is that financial markets express their views loud and clear, and the second is that central banks do whatever they can to make up for the lack of action on fiscal and structural matters. This sense of central banks concluding that they have to act where politicians fail is found on both sides of the Atlantic.

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