Peru quakes as Eurozone shakes

Eurozone leaders delivered relief to markets this week, confirming the positive vibes that had driven equities for days before. Ominously, however, bonds in the peripheral Eurozone economies didn't join the party. On Thursday the ECB bought Italian bonds to drive home the message but by Friday close the Italian 10-year yield was pushing back at 6% and an issue of 10-year bonds fetched slightly more than 6%. This is not a good formula - yields well above nominal GDP growth can trigger a debt downspiral. So an earthquake averted for the time being but tension remains. A real earthquake hit Peru, a country no stranger to tremblers, registering 6.9 Richter. This time thankfully the quake appears to have done limited damage to person and property unlike in 2007 when hundreds died and 40000 homes were wrecked. Hopefully this story just fades away but it is a reminder that the western coast of South America is constantly at risk. Peruvian miners appear unaffected so, although it is one of the world's major metals producers, commodities are unlikely to be hit. Many mining analysts are focused on supply now forgetting that demand issues are far more important when the world slows down, as it is now. The QSL is my only one on AM from Peru. It's a beaut - Radio Neuvo Continente, Cajamarca with only 1.5kW - heard in Morgan Bay, South Africa in 1992. This is a self-prepared card which I sent to the station and it also sent a nice letter in Spanish with details about the station and the region.