We think the Brexit vote is really a referendum on the European Union which we think has garnered all the positives from such a union, and now with rising debt to GDP ratios in the peripheral European countries they need the ability to monetize the debt through a currency devaluation like China.
It is such a waste of resources to be buying corporate debt by the ECB which tells you in and of itself that European Bonds are a sell right here. It is not like these European countries are going to stop issuing massive debt to finance out of control government spending programs that are unsustainable over the next 10 years.
The ECB has tried to sweep this rising debt issue under the table with their "Do anything it takes" bazooka rhetoric but traders and investors have done a bunch of the work for the ECB, and once the reality sets in that the ECB is just too small to be a backstop once the worm turns in European Bond Markets, anybody holding these assets on their books is going out of business full stop. Buy your CDS and Derivatives now on anybody holding this crap on their books because massive haircuts alone will not solve this upcoming stampede out of European Bonds.
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