As I predicted on Sunday the proposed new EU hedge fund regulation has been put on the back burner under pressure from Gord, well at least until after the election. Its a bit like Tom Lehar's Werner von Braun song. "The rockets go up, whoosh! Who cares where they come down. Its not my department". There won't be enough room in the dovecot when all Gord's pigeons come home to roost post 6th May!
Meanwhile the Greek saga grinds on like the Trojan horse entering Troy. Constructive ambiguity means nothing happens. The headlines say the EU is indulging in brinkmanship. The Greeks have picked up on this and are waiting to see the colour of the EU's money and the EU is being very coy about this. My prediction is this will grind on until the market precipitates a further crisis. As AEP writes in today's DT business, "EU fudges bail-out of Greece yet again." The Greek trauma will continue for a long and painful time.
Not content with this the EU commission has been lecturing all the EU states on their fudging and breaching of stability rules. The difference between the commission and national finance ministers is the former is unelected and the latter are all seeking re-election. The unelected versus the unelectable!
On the UK front the BoE has claimed QE has cut borrowing costs by one percent. Well I would like to see how they arrived at that figure! What it certainly shows is that unwinding QE is going to be a very painful business indeed. Post election I can see gilt yields easily going North of 6% at a 10 year tenor. Its the same problem with Afghanistan. Its very easy to put troops in to a conflict. Its much more difficult to withdraw these troops without horrendous casualties. Read the history of the First Afghan War c 1840, 2000 troops in, 2 came back alive.