Bloomberg Surveillance · Oct 9, 2026 · 32m · 15m saved
With Thierry Wizman, Global Currencies and Interest Rate Strategist at Macquarie · Ben Kallo, Senior Research Analyst, Sustainable Energy and Mobility at Baird · Jurrien Timmer, Director of Global Macro at Fidelity Investments · Monica Guerra, Head of US Policy at Morgan Stanley Wealth Management
Thierry Wizman counts four US failures that followed fast moves in interest rates: Franklin National in 1974, Continental Illinois in 1984, Orange County in 1994 and Silicon Valley Bank in 2023.
Most forecasters expect a slowing economy to end the climb in long-term Treasury yields. Wizman expects a financial accident to end it, and he said the borrower that fails could be a government.
"And by the way, France could be the Orange County of 2027." — Thierry Wizman
Thierry Wizman, Global Currencies and Interest Rate Strategist at Macquarie, on Bloomberg Surveillance, was part of the group at Bear Stearns that studied Latin America years ago, the host said. The episode also brings in Ben Kallo of Baird, who has covered Tesla since it went public; Jurrien Timmer, Director of Global Macro at Fidelity, who has written a weekly internal market note for decades; and Monica Guerra, Head of US Policy at Morgan Stanley Wealth Management, on the midterm elections.
The full episode is covered here so you can skip it. 32 minutes of audio, 17 minutes of reading.
Here are the 15 arguments that matter.
Key Takeaways
France's street protests and its rising borrowing costs feed each other, Wizman said
A failure at a bank, a private credit firm or a country may be what stops the rise in yields, not a slowing economy
Wizman sees a possible golden age for Latin America, with nearly every government in the region now aligned with the US
AI borrowers are not where the stress shows up, in Wizman's view, because their margins are huge and the borrowing is recent
GE Vernova's turbine service contracts work like a 15- to 20-year annuity, and Kallo said analysts are missing it
Timmer said AI is not a bubble because price-to-earnings ratios have fallen as earnings outran the market
Individual investors are buying bonds as fast as stocks, while central banks and regulated banks are not
Mortgage-bond hedging is driving much of the Treasury selloff since the 10-year passed 5%, Timmer said
Stocks usually fall in midterm years, Guerra said, and this year is the exception
1. France's Doom Loop
The host asked Wizman for a one-sentence summary of world events and whether they were connected.
Wizman said France's protests and its rising bond spreads drive each other
The spread is the extra yield investors demand to hold French government debt. As it rises, he said, the government is pushed to cut spending, which brings people into the streets to demand more spending.
"There's a bit of a doom loop happening in France here, whereby as sovereign spreads rise, it puts a lot more pressure on the government to reduce spending, but at the same time that pressure gets the people out in the streets, and they demand that the government spend more." — Thierry Wizman
The host said Eswar Prasad's book "The Doom Loop" sits on his coffee table. Wizman compared France with the loop of the European debt crisis, when banks owned large amounts of their governments' debt and governments were expected to rescue the banks.
"Here we have a doom loop between the bond market and the social protests." — Thierry Wizman
