The vigilantes are there ?? E.U... Bond Vigilantes Make Their Votes Known in Europe

http://blogs.wsj.com/economics/2011/11/23/bond-vigilantes-make-their-votes-known-in-europe/

Is there really such a thing ??

 www.dollarvigilante.com/ blog/ 2010/ 11/ 17/ where-are-the-bond-vigilantes.html

Bond Vigilantes Make Their Votes Known in Europe

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By Neal Lipschutz

They may have retired in the U.S., but the bond vigilantes are alive and well in Europe.

The stunning lack of interest in Wednesday’s sale of 10-year German bonds shows the so-called fire walls incessantly talked about to contain the euro-zone sovereign debt crisis are nowhere to be found. Instead, the fire blazes out of control.

As reported, Germany was only able to sell 3.6 billion euros of a planned 6 billion euros in 10-year bunds, among the safest debt on the planet. Yields had been declining in Germany as institutional investors already are ditching the IOUs of just about every other European country. Wednesday, German yields rose.

If Germany, the strongest and safest European country, now has to struggle to finance itself, the two-year-old European sovereign debt crisis has reached a new and even more dangerous phase.

Fast and significant action is needed, though the democratic systems in place in each of the affected European countries and in the still partial connection between those countries make swift and strong action extraordinarily unlikely.

Bond investors don’t care about the difficult and time-consuming struggles of representative democracies to coalesce around needed change. Thus the brilliant phrase, “bond vigilantes,” coined by U.S. Democratic adviser James Carville back in the 1990s to describe the push for U.S. budget-deficit cutting provided by bond types back then.

Probably the only reason those vigilantes aren’t also back in action in the U.S., given this democracy’s parallel inability to lay out a credible long-term deficit reduction plan, is that Europe is worse off and the money has to sit somewhere.

Markets, it has been famously said, swing between greed and fear. Fear is the stronger emotion. And while it might be prudent for each institutional investor to sell Europe now and ask questions later, just to be safe without true regard for the facts in each nation, the collective result of all those individual prudent decisions is a staggering negative.