http://www.bloomberg.com/news/2012-11-27/greece-wins-easier-terms-on-debt-as-eu-hails-rescue-formula.html
European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health.
In the latest bid to keep the 17-nation euro intact, the ministers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion-euro ($44.7 billion) loan installment in December. The euro rose to a three-week high on the agreement.
It seems the Europeans are doing everything to try and hold the Greeks in the Euro.
Bravo. They "found the formula"..."Defer and pretend" - don't try this at home.
Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street...Reminiscences of a Stock Operator
Tuesday, 27 November 2012
Tuesday, 20 November 2012
QE has done it's job so far...
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/19_Turk_-_This_Is_The_Chart_That_Every_Investor_Needs_To_See.html
...to lift asset values to make the debts appear manageable...some stats though you can't manage as well...the number of people on food stamps trends higher (recently).
...to lift asset values to make the debts appear manageable...some stats though you can't manage as well...the number of people on food stamps trends higher (recently).
Sunday, 18 November 2012
All looks great UNTIL it doesn't
The 3 years before the GFC and the two years after. The market participants missed the extent of the carnage that was to come. Complacency? Blindsided? Blackswanned?
What is not priced in now? And by how much?
IF the "solution" to a debt bubble is "inflation" why would you be holding government bonds now? Timing though can be a killer - You can be right and very early.
I suspect few see "runaway inflation". Yet inflation has been the standard since the creation of the Federal reserve...except for some deflation in the 1930s (under the gold standard)
What is not priced in now? And by how much?
IF the "solution" to a debt bubble is "inflation" why would you be holding government bonds now? Timing though can be a killer - You can be right and very early.
I suspect few see "runaway inflation". Yet inflation has been the standard since the creation of the Federal reserve...except for some deflation in the 1930s (under the gold standard)
As Kyle Bass said recently (in his letter to investors)
The fallacy of the
belief that countries that print their own currency are immune to sovereign
crisis will be disproven in the coming months and years. Those that treat this belief as
axiomatic will most likely be the biggest losers. A handful of investors and
asset managers have recently discussed an emerging school of thought, which
postulates that countries, as the sole manufacturer of their currency, can
never become insolvent, and in this sense, governments
are not dependent on credit markets to remain fiscally operational.
It is precisely this
line of thinking which will ultimately lead the sheep to slaughter.
Monday, 12 November 2012
Delays by design
you can get the banks to come clean OR you can allow the facade to to remain
the system has not been repaired...
Read more: http://www.foxbusiness.com/markets/2012/11/09/fed-delays-basel-iii-bank-capital-rules/#ixzz2C0IdCvs3
the system has not been repaired...
Fed Delays Basel III Bank Capital Rules
By Ronald D. Orol
Published November 09, 2012
MarketWatch Pulse
WASHINGTON – U.S. regulators on Friday agreed to delay indefinitely the effective date of a global agreement on greater bank capital buffers known as Basel III. The Federal Reserve and two other bank regulators introduced a proposal in June to implement the global agreement that suggested an effective date for institutions to comply of Jan. 1. However, the regulators agreed that "due to the wide range of views" expressed by interested institutions and others that a delay was necessary. They did not provide a substitute effective date for the rules, arguing that they are "working as expeditiously as possible to complete" them. The agreement is being implemented in response to the financial crisis of 2008. Other international agencies have delayed implementation of bank rules.
Copyright © 2012 MarketWatch, Inc.
Copyright © 2012 MarketWatch, Inc.
Read more: http://www.foxbusiness.com/markets/2012/11/09/fed-delays-basel-iii-bank-capital-rules/#ixzz2C0IdCvs3
Labels:
debt
Greece - It's a GREAT Depression
Even if the EMU machine succeeds in keeping Greece in the system, is this any longer a remotely desirable goal? Has it not become a vicious and immoral policy in itself?
I agree with the IFO Institute’s Hans-Werner Sinn that upholding euro membership has by now become an act of cruelty. It not being done in the interests of Greeks. It is being done for the Project, by enforcers of the Project. Only by breaking free can Greece restore a minimum of economic vibrancy and national dignity.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100021180/who-will-stop-the-sado-monetarists-as-jobless-youth-hits-58pc-in-greece/
Trapped in a currency they can't control.
Unemployment rate of youth at 50% plus.
Does this sound like a "good" plan for the greeks?
I agree with the IFO Institute’s Hans-Werner Sinn that upholding euro membership has by now become an act of cruelty. It not being done in the interests of Greeks. It is being done for the Project, by enforcers of the Project. Only by breaking free can Greece restore a minimum of economic vibrancy and national dignity.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100021180/who-will-stop-the-sado-monetarists-as-jobless-youth-hits-58pc-in-greece/
Trapped in a currency they can't control.
Unemployment rate of youth at 50% plus.
Does this sound like a "good" plan for the greeks?
Labels:
debt,
Government
Wednesday, 7 November 2012
"It's a maths problem"
http://www.sovereignman.com/expat/i-apologize-for-what-youre-about-to-read-9397/
Simon Black summarises it well (above link)
It took just 286 days to accumulate the most recent trillion (from $15 trillion to $16 trillion).
Last month alone, the first full month of Fiscal Year 2013, the US government accumulated nearly $200 billion in new debt– 20% of the way to a fresh trillion in just 31 days.
The big issue about to hit is the "fiscal cliff" - that is the gap between what the government brings in and spends. Certain tax breaks are due to expire meaning greater taxes will come from the taxpayer. Taxing will not lead to growth - growth is the only option the US has to get over the debt binge and prevent the banks from further writedowns.
The printing press must continue...
Simon Black summarises it well (above link)
It took just 286 days to accumulate the most recent trillion (from $15 trillion to $16 trillion).
Last month alone, the first full month of Fiscal Year 2013, the US government accumulated nearly $200 billion in new debt– 20% of the way to a fresh trillion in just 31 days.
The big issue about to hit is the "fiscal cliff" - that is the gap between what the government brings in and spends. Certain tax breaks are due to expire meaning greater taxes will come from the taxpayer. Taxing will not lead to growth - growth is the only option the US has to get over the debt binge and prevent the banks from further writedowns.
The printing press must continue...
Labels:
debt,
Government,
USD
Tuesday, 6 November 2012
Are politicians going to take the soft political option?
What really broke Germany was the constant taking of the soft political option in respect of money. The take-off point therefore was not a financial but a moral one; and the political excuse was despicable, for no imaginable political circumstances could have been more unsuited to the imposition of a new financial order than those pertaining in November 1923, when inflation was no longer an option. The Rentenmark was itself hardly more than an expedient then, and could scarcely have been introduced successfully had not the mark lost its entire meaning. Stability came only when the abyss had been plumbed, when the credible mark could fall no more, when everything that four years of financial cowardice, wrong-headedness and mismanagement had been fashioned to avoid had in fact taken place, when the inconceivable had ineluct-ably arrived.
From When Money Dies by Adam Fergusson
From When Money Dies by Adam Fergusson
Labels:
debt,
Government
Sunday, 4 November 2012
Irving Fisher in 1933 summarised it well...
In summary, we find that: (1) economic changes include steady trends and unsteady occasional disturbances which act as starters for cyclical oscillations of innumerable kinds; (2) among the many occasional disturbances, are new opportunities to invest, especially because of new inventions; (3) these, with other causes, sometimes conspire to lead to a great volume of over-indebtedness; (4) this, in turn, leads to attempts to liquidate; (5) these, in turn, lead
(unless counteracted by reflation)
to falling prices or a swelling dollar; (6) the dollar may swell faster than the number of dollars owed shrinks; (7) in that case, liquidation does not really liquidate but actually aggravates the debts, and the depression grows worse instead of better, as indicated by all nine factors; (8) the ways out are either
via laissez faire (bankruptcy) or scientific medication (reflation), and reflation might just as well have been applied in the first place.
It's a fine line...you go down austerity and you end up with Greece style growth and unemployment...and a lost generation...and a disturbance of the peace.
Labels:
debt
Saturday, 3 November 2012
USD - countries are acting
we don't want your dollars!
http://www.nationmultimedia.com/business/Yen-yuan-direct-trading-to-begin-on-Friday-30183064.html
May 2012
Beijing - China and Japan have agreed to begin direct-trading of their currencies from Friday, avoiding use of the dollar as an intermediary currency, the two governments said.
The direct currency trading was designed to promote bilateraltrade, facilitate the use of the yuan and the yen in international trade settlement, and lower the cost of currency conversion, the China Foreign Exchange Trade System said Tuesday.
The People’s Bank of China, China’s central bank, said it would support the "important step in strengthening cooperation between China and Japan in developing financial markets." The move followed an agreement to strengthen financial cooperation by Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda in December.
China is Japan’s largest trading partner with bilateral trade valued at 345 billion dollars last year.
An estimated 60 per cent of trade between China and Japan is settled in US dollars, China’s official Xinhua news agency said.
Using the dollar as an intermediary, the yuan can be tradeda gainst the currencies of Japan, the European Union, Britain, HongKong, Malaysia, Russia, Australia and Canada, the agency said.
http://www.theaustralian.com.au/business/markets/direct-a-yuan-conversion-to-save-costs-treasurer/story-e6frg94o-1226423563725
July 2012
AUSTRALIA will discuss with Chinese officials the potential for direct conversion of the Australian dollar and the Chinese yuan for transactions completed in mainland China, Treasurer Wayne Swan said today.
...
The Reserve Bank of Australia and the People's Bank of China signed a $30 billion currency swap line in March to support liquidity in Australian dollar-yuan trades.
http://www.bbc.co.uk/news/business-18545978
July 2012
It will allow their respective central banks to exchange local currencies worth up to 60bn reais or 190bn yuan ($30bn; £19bn).
http://www.zerohedge.com/news/usd-trap-closing-dollar-exclusion-zone-crosses-pacific-brazil-signs-china-currency-swap
http://www.nationmultimedia.com/business/Yen-yuan-direct-trading-to-begin-on-Friday-30183064.html
May 2012
Beijing - China and Japan have agreed to begin direct-trading of their currencies from Friday, avoiding use of the dollar as an intermediary currency, the two governments said.
The direct currency trading was designed to promote bilateraltrade, facilitate the use of the yuan and the yen in international trade settlement, and lower the cost of currency conversion, the China Foreign Exchange Trade System said Tuesday.
The People’s Bank of China, China’s central bank, said it would support the "important step in strengthening cooperation between China and Japan in developing financial markets." The move followed an agreement to strengthen financial cooperation by Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda in December.
China is Japan’s largest trading partner with bilateral trade valued at 345 billion dollars last year.
An estimated 60 per cent of trade between China and Japan is settled in US dollars, China’s official Xinhua news agency said.
Using the dollar as an intermediary, the yuan can be tradeda gainst the currencies of Japan, the European Union, Britain, HongKong, Malaysia, Russia, Australia and Canada, the agency said.
http://www.theaustralian.com.au/business/markets/direct-a-yuan-conversion-to-save-costs-treasurer/story-e6frg94o-1226423563725
July 2012
AUSTRALIA will discuss with Chinese officials the potential for direct conversion of the Australian dollar and the Chinese yuan for transactions completed in mainland China, Treasurer Wayne Swan said today.
...
The Reserve Bank of Australia and the People's Bank of China signed a $30 billion currency swap line in March to support liquidity in Australian dollar-yuan trades.
http://www.bbc.co.uk/news/business-18545978
July 2012
China and Brazil have agreed a
currency swap deal in a bid to safeguard against any global financial crisis and
strengthen their trade ties.
It will allow their respective central banks to exchange local currencies worth up to 60bn reais or 190bn yuan ($30bn; £19bn).
http://www.zerohedge.com/news/usd-trap-closing-dollar-exclusion-zone-crosses-pacific-brazil-signs-china-currency-swap
Labels:
USD
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