Heisenberg Challenge: Spot The Odd One Out

Heisenberg Challenge: Spot The Odd One Out

I’ve talked a ton about this, but I think it’s important to continually track how different assets are or aren’t pricing in the risk associated with a prospective Marine Le Pen victory in France.

Let’s try a fun game. Below, find charts showing OATs versus bunds, 2014 France CDS versus the 2003 contracts, and spreads on foreign-law versus domestic-law French corporate bonds.

Look at these charts and ask yourself the following: “Is French election risk being appropriately priced?”

There are three answers: 1) “Probably,” 2) “Not really, but at least the market seems to be trying,” and 3) “WTF! No, not at all.” See if you can correctly apply the labels (the ovals should help).

Sovereign spread:





Corporate credit:





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