Europe's Bond Markets Are Only Getting Uglier

It is not a single story, but a series of incidents, that is moving me to the view that Europe is in real trouble. The politicians will say how well things are going on the Continent, but a broad assessment of what is happening leads to a very different conclusion.

With the failure of Banco Popular, and then several of the Italian banks, new precedents have been set. Institutional investors have either suffered heavy losses or been wiped out, while local bondholders were “mis-sold” securities and got all of their money back. How convenient. The reality is that bank indentures in the European Union now have no meaning. You can read them, but they can’t be trusted as they are little more than dried ink scribbled on paper.