{"id":4224,"date":"2026-10-12T07:55:41","date_gmt":"2026-10-12T07:55:41","guid":{"rendered":"https:\/\/bricksandmortarmgt.com\/?p=4224"},"modified":"2026-10-12T07:55:41","modified_gmt":"2026-10-12T07:55:41","slug":"sovereign-crisis-france-blow-out-right-on-cue-chartporn-3","status":"publish","type":"post","link":"https:\/\/bricksandmortarmgt.com\/zh_hk\/2026\/10\/sovereign-crisis-france-blow-out-right-on-cue-chartporn-3\/","title":{"rendered":"sovereign crisis – France blow out right on cue – chartporn 3"},"content":{"rendered":"\t\t
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The recent French riots is but the tip of the iceberg in what could spiral out of control in the 2nd largest economy in the EU, as we have aluded to for some time now. The next big crisis will be from sovereign bonds, and France is indeed leading the charge (see here<\/a>). More graphically, the debt pile is now much higher than even the USSR at the time it broke up:<\/p>\n\n\n\n
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<\/p>\n

Europe faltering on all fronts<\/strong><\/p>\n

The woes in Europe does not stop at the English Channel – as indicated in the how HSBC may be caught in a rising tax trap (see Article 7<\/strong>), UK is also facing some severe fiscal challenges and tax hikes may be the only solution, which will surely weaken the tax base even further.<\/p>\n

And Germany’s continuous decline in manufacturing output (Article 1<\/strong>) could further undermine investor confidence when any bad statistic hits the wires next. All major economies are now in a spiralling interest cycle, and any default by a weak payer could trigger the next contagion:<\/p>\n\n\n\n
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On top of all this, when more central banks next hike policy rates, the momentum could accelerate in long bond yield increases:<\/p>\n

  Fed \u2013 further 50bp of Fed hikes expected
  RBA \u2013 risk of further tightening this year
  ECB – 25bp hike expected by year end
  BoE \u2013 a 25bp hike by year end
  BoC – expect to lift 25bp in both December and March<\/p>\n

While some banks may be advocating long bonds at this juncture (below chart <\/strong>shows massive long bets on bonds right now), may be due to myopic focus of very short term trading patterns, the mega multi-decade turning point upon us could swiftly sweep all longs into big losses, so beware of who you listen to…<\/p>\n\n\n\n
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Other factors to exacerbate rate pressures<\/strong><\/p>\n

There are some truly worrying developments all over the place that suggest inflationary pressures will not ease, for example, Supertanker Rates Soaring To Near Record $1 Million A Day, adding cost of oil and bulk commodities being shipped (Article 2<\/strong>), and even in the US, diesel prices are reaching new highs:<\/p>\n\n\n\n
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Deglobalisation \/ trade fragmentation add headwinds<\/strong><\/p>\n

As govts lose people’s confidence (eg Scottish, Welsh and Northern Irish leaders meet to plan break-up of United Kingdom, Article 3<\/strong>), separatist movements is now clearly on the march, increasing trade and investment friction, further adding to inflationary pressures. The next one to watch will be the Alberta vote to leave Canada:<\/p>\n\n\n\n
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Meanwhile increasing temptation to add sanctions will further disrupt global supply chains, as Trump signed the Russia and Iran Sanctions Bill (Article 4<\/strong>)…<\/p>\n

US should be safer, private sector in better shape, but hyperscalers…<\/strong><\/p>\n

Although the US debt situation is severe (most of 2026 rollover is already on short duration, and likely see some coupon inflation soon, see chart <\/strong>below), the likely blow up first shot will be fired in Europe or Japan, or some other fringe economies.<\/p>\n\n\n\n
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We continue to see the pandemic to be centred on public sector, as for the first time in the past 70 years, govt debt is by far the biggest elephant in the room:<\/p>\n\n\n\n
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Also worth staying vigilant is how the new bubble of AI may be pricked given how extended the euphorial rises have become, and of course with it all the hundreds of billions of AI related debt issued of late:<\/p>\n\n\n\n
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Risk of false flags rising<\/strong><\/p>\n

When govts lose control, the temptation rises to create false flags to divert attention to ‘external enemies’; the institution of emergency conditions may also conveniently defer or cancel elections in which current politicians in power could dodge the unavoidable losses facing them. The telltail signs are now becoming quite obvious:<\/p>\n

– Poland’s prime minister warns of Russian ‘accidental’ attacks on Ukraine’s allies (Article 5<\/strong>);<\/p>\n

– Moscow Sends Nuclear Warning to NATO as Tensions Rise in the Baltic (Article 6<\/strong>)<\/p>\n

So many things can go wrong, and some of them catastrophically… all we can hope is to be prepared and safeguard our own immediate circle of care. Hope our fears of the bad outcomes are overly pessimistic, it still does not make the case for preparation invalid.<\/p>\n

———————
Article 1<\/b>: Who backstops the backstop?
<\/span>https:\/\/bondvigilantes.com\/blog\/2026\/09\/who-backstops-the-backstop\/<\/span><\/a><\/p>\n

Article 2<\/b>: Mideast Chaos Sends Supertanker Rates Soaring To Near Record $1 Million A Day
https:\/\/www.zerohedge.com\/energy\/mideast-chaos-sends-supertanker-rates-soaring-800000-day<\/span><\/a><\/p>\n

Article 3<\/b>: Scottish, Welsh and Northern Irish leaders meet to plan break-up of United Kingdom
https:\/\/www.telegraph.co.uk\/politics\/2026\/09\/13\/irish-scots-and-welsh-leaders-meet-to-plot-break-up-uk\/<\/span><\/a><\/p>\n

Article 4<\/b>: Trump Signs Russia and Iran Sanctions Bill
https:\/\/www.theepochtimes.com\/us\/trump-signs-russia-and-iran-sanctions-bill-6089946<\/span><\/a><\/p>\n

Article 5<\/b>: Poland’s prime minister warns of Russian ‘accidental’ attacks on Ukraine’s allies
https:\/\/www.npr.org\/2026\/09\/18\/nx-s1-5973265\/poland-nato-russia<\/span><\/a><\/p>\n

Article 6<\/b>: Moscow Sends Nuclear Warning to NATO as Tensions Rise in the Baltic
https:\/\/www.themoscowtimes.com\/2026\/09\/30\/moscow-sends-nuclear-warning-to-nato-as-tensions-rise-in-the-baltic-a93828<\/span><\/a><\/p>\n

Article 7<\/b>: \u6ed9\u63a7\u6050\u8981\u9032\u8ca2\u502b\u6566 \u518d\u975e\u6536\u606f\u9996\u9078
https:\/\/www.hkej.com\/dailynews\/article?id=4535013<\/span><\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

…<\/p>\n

sovereign crisis – France blow out right on cue – chartporn 3<\/span> Read More \u00bb<\/a><\/p>","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","content-type":"","_monsterinsights_skip_tracking":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-global-header-display":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","footnotes":""},"categories":[1033,1356],"tags":[1948,1689,1988,1911,1834,1986,1958,1987,1586,1989],"class_list":["post-4224","post","type-post","status-publish","format-standard","hentry","category-economic","category-global","tag-bond-markets","tag-deglobalisation","tag-energy-inflation","tag-government-deficits","tag-high-inflation","tag-hyperscalers","tag-interest-rates","tag-oat","tag-sovereign-debt-crisis","tag-trade-fragmentation"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts\/4224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/comments?post=4224"}],"version-history":[{"count":8,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts\/4224\/revisions"}],"predecessor-version":[{"id":4232,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts\/4224\/revisions\/4232"}],"wp:attachment":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/media?parent=4224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/categories?post=4224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/tags?post=4224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}