[ExI] disadvantage of x

[Stefano Ticozzi]

Hi Spike,

I watched the initial part of the video. It is a non-technical video, both
from a political and a financial perspective. I work as a trader of euro
interest rate derivatives, so I spend a large part of my working day
reading Bloomberg news and monitoring interest rates swaps (levels,
volatility, curve shape, etc.).

Undoubtedly, France is facing a complex situation, but what the markets
"think", meaning what they are pricing in as the central scenario, is the
following: Marine Le Pen (right-wing) will win the next election and then
follow a path similar to that of Giorgia Meloni (right-wing, current
Italian Prime Minister), who, after coming to power, largely abandoned her
more radical positions and moved toward the political center.

Let me provide just a couple of pieces of evidence supporting this view.
First, the French 10-year government bond yields around 4.9%, compared with
a risk-free rate of approximately 3.4%. In other words, the 10-year
sovereign risk premium is only about 1.5%. That is "a lot" compared with
one year ago, but still "very little" in absolute terms. Second, yesterday
Moody’s confirmed France’s sovereign debt rating at Aa3 (a very high
rating, and higher than Italy’s, for example).

Lagarde says that France has to manage on its own? That is absolutely not
alarming and perfectly normal. Communications to the market are always
meant to be reassuring. If she were to declare that France needs help, we
certainly would not be looking at 10-year yields of just 4.9%.

What can the ECB do? In reality, quite a lot. In July 2022 ECB accounced
the Transmission Protection Instrument (TPI). Under the TPI, the ECB could
carry out potentially unlimited purchases of govies of jurisdictions
experiencing unwarranted deterioration in financing conditions and
disruption to the transmission mechanism of monetary policy.

ciao,
stefano

On Tue, Oct 27, 2026 at 4:46 PM spike jones via extropy-chat <
extropy-chat at lists.extropy.org> wrote:

>
> TwitterX vaguely agrees that basic causes of the French riots are
> primarily economic.  They sent me here:
>
> https://www.youtube.com/watch?v=d2n4qXk31TA
>
> I am open to suggestion or comment.
>
> spike
>
>
> _______________________________________________
> extropy-chat mailing list
> extropy-chat at lists.extropy.org
> http://lists.extropy.org/mailman/listinfo.cgi/extropy-chat
>
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