Thursday 9, June 2022
The ECB changes tack
The ECB announced that it would end QE and start to raise rates. The various policy rates have been pinned to the floor since 2016, but next month will start to rise, as inflation shows itself to be, errr, not transitory. This is a watershed. Euro equities were hit hard, as were bonds. BTPs (Italian longer term bonds) were hit hardest. Bunds were hit too. BTPs are now yielding 3.7%. If this translates into a funding cost for the Italian govt., there will be bad consequences. Will this be the end of the Euro? Possibly not, but it’s maybe the beginning of the end, or maybe the beginning of the beginning of the end.
I am now posting my Twitter links and images on Reddit. Checkout r/stevehemingway for them.
I went to a wine tasting evening a short time ago. This article suggests that the reliability of wine evaluation is poor. I’ve been sceptical that the long ardous training to become a master of wine is akin to the study required to become a priest. It discourages the sceptical and selects out the true believers (or, at least those with too much in the way of sunk costs) to become proselytes of wine. However, as a social evening, this was very pleasant. I met some young people (a treat for me!), who seemed engaged and normal, and even local. This was pure serendipity, as I chose my table essentially at random. Anyway, I hope I will meet some of them again.
I am trying to perfect the script that uploads this to Reddit, but I haven’t had much time to work on it today, so it’s still a mess.