One wonders how much of your happy investing has to do with CHINA migrating its US debt portfolio out of short term T-bills and into longer term bonds.
I'm informed they moved something like $1 Trillion into longer term bonds in the last few months.
The EURO thread
- Thread starter Trajan
- Start date
One wonders how much of your happy investing has to do with CHINA migrating its US debt portfolio out of short term T-bills and into longer term bonds.
I'm informed they moved something like $1 Trillion into longer term bonds in the last few months.
Cuyo
Training a Guineapig army
I've been trying to buy some chinchillas from €urope here recently, and I can state as fact that the high relativity of the €uro to the dollar is making that a very difficult prospect.
Trajan
conscientia mille testes
- Thread starter
- #23
interesting chart from ZH...they have rearranged their own deck chairs and nobody else was invited to the poop deck. what a joke. Giving them one more dime is just , I don't know, are these people intelligent...really? Because all indicators say no.
Trajan
conscientia mille testes
- Thread starter
- #24
and to cheer us up this Saturday morning.....only in the EU does Ireland, Greece and Portugal NOT constitute a canary ion a coal mine.
Moody's Puts Italy's Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?"
RATIONALE FOR REVIEW
First, the Italian economy faces growth challenges in an environment characterized by long-term structural impediments to growth and potentially rising interest rates. Structural economic weaknesses -- mainly low productivity and important labour and product market rigidities -- have been a major impediment to growth in the last decade and continue to hinder the economy's recovery from the severe recession it experienced in 2009. Italy has so far only recovered a fraction of the nearly seven percentage points in GDP that it lost during the global crisis, despite low interest rates, which are likely to rise in the medium term. Growth prospects for the Italian economy in the coming years will be a crucial factor that will determine the government's revenues and the achievement of fiscal consolidation targets.
Second, there are implementation risks to the fiscal consolidation plans that are required to reduce Italy's stock of public debt to more affordable levels. Against a backdrop of rising interest rates and weak economic growth, the government may find it difficult to generate the primary surpluses that are needed to place the public debt-to-GDP ratio and the interest burden on a solid downward trend. The adoption of additional conservative fiscal policies may prove more difficult in the near future because the current government's electoral support is weakening, with the government facing challenges in gaining public approval for its policies. For example, the government's recent energy and water supply proposals were rejected by popular vote.
Third, the fragile market sentiment that continues to surround European sovereigns with high levels of debt poses additional risks for Italy. The continued stability of market demand for Italy's debt is uncertain at current yields. Although future policy actions within the euro area could reduce investors' concerns and stabilize funding costs, the opposite is also possible. In any event, going forward, investors appear likely to differentiate more among euro area sovereign borrowers than they did prior to the financial crisis, to the disadvantage of euro area countries with higher-than-average debt burdens, like Italy.
Moody's Puts Italy's Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?" | zero hedge
Moody's Puts Italy's Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?"
RATIONALE FOR REVIEW
First, the Italian economy faces growth challenges in an environment characterized by long-term structural impediments to growth and potentially rising interest rates. Structural economic weaknesses -- mainly low productivity and important labour and product market rigidities -- have been a major impediment to growth in the last decade and continue to hinder the economy's recovery from the severe recession it experienced in 2009. Italy has so far only recovered a fraction of the nearly seven percentage points in GDP that it lost during the global crisis, despite low interest rates, which are likely to rise in the medium term. Growth prospects for the Italian economy in the coming years will be a crucial factor that will determine the government's revenues and the achievement of fiscal consolidation targets.
Second, there are implementation risks to the fiscal consolidation plans that are required to reduce Italy's stock of public debt to more affordable levels. Against a backdrop of rising interest rates and weak economic growth, the government may find it difficult to generate the primary surpluses that are needed to place the public debt-to-GDP ratio and the interest burden on a solid downward trend. The adoption of additional conservative fiscal policies may prove more difficult in the near future because the current government's electoral support is weakening, with the government facing challenges in gaining public approval for its policies. For example, the government's recent energy and water supply proposals were rejected by popular vote.
Third, the fragile market sentiment that continues to surround European sovereigns with high levels of debt poses additional risks for Italy. The continued stability of market demand for Italy's debt is uncertain at current yields. Although future policy actions within the euro area could reduce investors' concerns and stabilize funding costs, the opposite is also possible. In any event, going forward, investors appear likely to differentiate more among euro area sovereign borrowers than they did prior to the financial crisis, to the disadvantage of euro area countries with higher-than-average debt burdens, like Italy.
Moody's Puts Italy's Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?" | zero hedge
Political Junky
Gold Member
- May 27, 2009
- 25,793
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I'd welcome a drop in the value of the Euro, myself, but I don't see it happening.
XE - Universal Currency Converter
XE - Universal Currency Converter
Zander
Platinum Member
I am generally a contrarian investor- I go the opposite of the herd. When I bought the long bond in February, the bearish sentiment was at 97% (the market was convinced that long term interest rates would rise). China may have helped, I really don't know.
Trajan
conscientia mille testes
- Thread starter
- #27
angies in...UK is out. 
UK banks abandon eurozone over Greek default fears
UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a Lehman-style event connected to a Greek default.
UK banks abandon eurozone over Greek default fears - Telegraph
UK banks abandon eurozone over Greek default fears
UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a Lehman-style event connected to a Greek default.
UK banks abandon eurozone over Greek default fears - Telegraph
Magnum2
Rookie
- Jun 22, 2011
- 8
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The question is, how long will the German people continue to pay Greeks to sit around all day, doing nothing but passing olive scented gas? When the state pays people to do nothing, guess what they'll do?
The Euro is over. It will not survive. It was doomed from the beginning.
If Greece defaults, Germany, France, and to a lesser extent, Britain are in big big trouble.
Trajan
conscientia mille testes
- Thread starter
- #29
the sky is falling!!!!!!!!!!
Greece Deputy PM Warns Of Tanks In The Streets, Mass Suicides, If Second Bailout Voted Down By Greek Parliament
With just days left until the crucial vote on passing the Greek mid-term austerity package, the assured destruction rhetoric used by the Greek status quo has hit fever pitch. Just to make sure the message is not lost on the broader population that Europe's banks will not admit defeat in a vote that could end the kleptocratic cartel's hegemony for ever, Greece's Deputy Prime Minister Theodoros Pangalos has blasted suggestions that it would be better for his country to abandon the euro and return to the drachma as an "immense stupidity". He didn't stop there. For dramatic impact, the Greek vice PM also said that the country would devolve into complete anarchy, with tanks roaming the streets, a population on the verge of civil war, with mass suicides, just for dramatic impact, should bankers not get their way. More or less in line with the Hank Paulson script that is regurgitated every few years when the Ponzi system is on the verge of imploding yet again.
From AFP:
"Those who say this are extremely stupid. While they may be analysts, university professors or economists, saying that is an immense stupidity," Pangalos told daily Spanish newspaper El Mundo in an interview published Sunday.
Debt-wracked Greece has been told by European peers that it cannot hope to continue receiving aid from a 110-billion-euro rescue package agreed with the EU and the IMF last year without biting budget reforms and privatisations.
The Greek parliament will vote on an austerity package this week but some economists have argued that Athens needs to restructure its debt and leave the euro to become economically competitive again.
"Returning to the drachma would mean that on the following day banks would be surrounded by terrified people trying to withdraw their money, the army would have to protect them with tanks because there would not be enough police," said Pangalos.
"There would be riots everywhere, shops would be empty, some people would throw themselves out the window ... And it would also be a disaster for the entire European economy."
more at-
Greece Deputy PM Warns Of Tanks In The Streets, Mass Suicides, If Second Bailout Voted Down By Greek Parliament | zero hedge
Greece Deputy PM Warns Of Tanks In The Streets, Mass Suicides, If Second Bailout Voted Down By Greek Parliament
With just days left until the crucial vote on passing the Greek mid-term austerity package, the assured destruction rhetoric used by the Greek status quo has hit fever pitch. Just to make sure the message is not lost on the broader population that Europe's banks will not admit defeat in a vote that could end the kleptocratic cartel's hegemony for ever, Greece's Deputy Prime Minister Theodoros Pangalos has blasted suggestions that it would be better for his country to abandon the euro and return to the drachma as an "immense stupidity". He didn't stop there. For dramatic impact, the Greek vice PM also said that the country would devolve into complete anarchy, with tanks roaming the streets, a population on the verge of civil war, with mass suicides, just for dramatic impact, should bankers not get their way. More or less in line with the Hank Paulson script that is regurgitated every few years when the Ponzi system is on the verge of imploding yet again.
From AFP:
"Those who say this are extremely stupid. While they may be analysts, university professors or economists, saying that is an immense stupidity," Pangalos told daily Spanish newspaper El Mundo in an interview published Sunday.
Debt-wracked Greece has been told by European peers that it cannot hope to continue receiving aid from a 110-billion-euro rescue package agreed with the EU and the IMF last year without biting budget reforms and privatisations.
The Greek parliament will vote on an austerity package this week but some economists have argued that Athens needs to restructure its debt and leave the euro to become economically competitive again.
"Returning to the drachma would mean that on the following day banks would be surrounded by terrified people trying to withdraw their money, the army would have to protect them with tanks because there would not be enough police," said Pangalos.
"There would be riots everywhere, shops would be empty, some people would throw themselves out the window ... And it would also be a disaster for the entire European economy."
more at-
Greece Deputy PM Warns Of Tanks In The Streets, Mass Suicides, If Second Bailout Voted Down By Greek Parliament | zero hedge
- Sep 12, 2008
- 14,201
- 3,567
- 185
Spain is in trouble again too.
Today was about Italy.
In some ways, it's fairly odd, given that Italy doesn't have a big deficit and has been reducing it's deficit over time. It didn't have a big bubble and it's banks aren't distressed, or at least not more so than other European banks. However, it was the third slowest growing economy in the world over the past decade, with only Zimbabwe and another country worse. It has negative productivity and a lot if debt.
In some ways, it's fairly odd, given that Italy doesn't have a big deficit and has been reducing it's deficit over time. It didn't have a big bubble and it's banks aren't distressed, or at least not more so than other European banks. However, it was the third slowest growing economy in the world over the past decade, with only Zimbabwe and another country worse. It has negative productivity and a lot if debt.
Trajan
conscientia mille testes
- Thread starter
- #33
I hear you but I see this as I am sure you as part and parcel of the contagion they simply cannot handle....the IMF wants us to up our contributions for greece et al, Spain? Italy? (Portugal is lost to them period)
The Euro house of cards is folding, merkel may have already committed political suicide and the German people will reached their limit if they already are not there yet.
Oh and Italy has a HUUUUUUUUUGE off the books cash economy. I doubt they collect half the taxes they could.
Trajan
conscientia mille testes
- Thread starter
- #34
well Greece misses more benchmarksFitch has downgraded them again.......Ireland is in junk status now too......well, heres the IMF to the rescue ( with OUR money too)....*sigh*
just dump Greece, Merkel save yourself my kleingebäck, pick up the phone get with Sark and just fucking dump their asses.
L....e....t.........them....GO.
just dump Greece, Merkel save yourself my kleingebäck, pick up the phone get with Sark and just fucking dump their asses.
L....e....t.........them....GO.
freedombecki
Let's go swimmin'!
Maybe the people will band together and start helping each other out over there. I was of the understanding they pay double the price for gasoline as us, and having been over there and having seen the prices in their gift stores on both sides of the Baltic Sea, I was just wondering how average people could get by as far back as 2006, when the world seemed a lot lusher. I'm not much of a financier, but I am putting all of them on my prayer list, and us, too. Night, fellas. Carry on.
- Sep 12, 2008
- 14,201
- 3,567
- 185
With all of the south Euro zone in trouble, there is no way the Germans can keep bailing.
Especially since it seems that the south Euro zone isn't serious about reforms.
Especially since it seems that the south Euro zone isn't serious about reforms.
Trajan
conscientia mille testes
- Thread starter
- #37
interesting article.....
The Euro Endgame
At last, the voters
Aug 1, 2011,
Billion by billion by billion, showdown by argument by ultimatum, Greece’s latest bailout is being put together by those who run the eurozone. The country’s finances are so bad, and its prospects so poor, that even the new $159 billion rescue package announced on Thursday will (assuming it comes into effect) probably only prove to be a reprieve.
Never mind. Buying time is the name of the game. If Greece can be kept going, and Portugal and Ireland too, financial markets might, fingers crossed, calm down, and the threat that panic might engulf Spain and Italy—two economies too big to bail—and the banks that have lent to them might recede. Then, come July 2013, the $1.1 trillion European Stability Mechanism will spring to life. It will be backed by the 17 members of the eurozone, be policed by Brussels, and it will inherit the proto-IMF powers now being proposed for the European Financial Stability Facility that it will succeed. Well, that is the plan (at the time of writing), complete with a hint of Ponzi, a dash of Micawber, and dire warnings of what the alternative might be.
There’s a lot that needs not to go wrong, but of all the elements that could, the most dangerous may come from a source that Brussels has long tried to write out of the plot: the ballot box. There’s an irony to that. If there was anything (other than misplaced Carolingian nostalgia) at the heart of the project for a European union it was the idea that, after the wars of the first half of the twentieth century, the peoples of the old world could no longer be trusted with their own sovereignty. It’s never been much of an argument, but it’s worked well enough for the EU’s emerging technocratic elite.
The establishment of the euro is thus best understood as just another stage in the progressive disenfranchisement of Europe’s voters. The replacement of domestic currencies with what was, in effect, foreign money meant that, as a practical matter, the countries (and particularly the weaker countries) of the eurozone lost much of what was left of their fiscal and economic autonomy. Previously a nation with subpar finances and/or an uncompetitive cost base could allow the depreciation of its lira, its drachma, or its escudo to restore some balance. Its standard of living might fall relative to its international competitors’, but it could usually muddle along in the fashion that its people had, one way or another, chosen.
Now that option was closed. Forget the voters; once a country could no longer print its own money it had to run itself in ways that ensured it could keep international creditors—which is to say all creditors—happy. More generally, it had to manage itself in a manner that allowed it to keep reasonably close to the pacesetters of the monetary union in which it now dwelt—and if that country was Greece and the pacesetter was Germany, that was only going to be possible (if at all) with wrenching political and cultural change. That change might have been desirable, but to think that external discipline alone would be enough to set it in motion was a fatal conceit.
more at-
The Euro Endgame | The Weekly Standard
it just takes one to drop the euro, the rest will run like scolded cats.
The Euro Endgame
At last, the voters
Aug 1, 2011,
Billion by billion by billion, showdown by argument by ultimatum, Greece’s latest bailout is being put together by those who run the eurozone. The country’s finances are so bad, and its prospects so poor, that even the new $159 billion rescue package announced on Thursday will (assuming it comes into effect) probably only prove to be a reprieve.
Never mind. Buying time is the name of the game. If Greece can be kept going, and Portugal and Ireland too, financial markets might, fingers crossed, calm down, and the threat that panic might engulf Spain and Italy—two economies too big to bail—and the banks that have lent to them might recede. Then, come July 2013, the $1.1 trillion European Stability Mechanism will spring to life. It will be backed by the 17 members of the eurozone, be policed by Brussels, and it will inherit the proto-IMF powers now being proposed for the European Financial Stability Facility that it will succeed. Well, that is the plan (at the time of writing), complete with a hint of Ponzi, a dash of Micawber, and dire warnings of what the alternative might be.
There’s a lot that needs not to go wrong, but of all the elements that could, the most dangerous may come from a source that Brussels has long tried to write out of the plot: the ballot box. There’s an irony to that. If there was anything (other than misplaced Carolingian nostalgia) at the heart of the project for a European union it was the idea that, after the wars of the first half of the twentieth century, the peoples of the old world could no longer be trusted with their own sovereignty. It’s never been much of an argument, but it’s worked well enough for the EU’s emerging technocratic elite.
The establishment of the euro is thus best understood as just another stage in the progressive disenfranchisement of Europe’s voters. The replacement of domestic currencies with what was, in effect, foreign money meant that, as a practical matter, the countries (and particularly the weaker countries) of the eurozone lost much of what was left of their fiscal and economic autonomy. Previously a nation with subpar finances and/or an uncompetitive cost base could allow the depreciation of its lira, its drachma, or its escudo to restore some balance. Its standard of living might fall relative to its international competitors’, but it could usually muddle along in the fashion that its people had, one way or another, chosen.
Now that option was closed. Forget the voters; once a country could no longer print its own money it had to run itself in ways that ensured it could keep international creditors—which is to say all creditors—happy. More generally, it had to manage itself in a manner that allowed it to keep reasonably close to the pacesetters of the monetary union in which it now dwelt—and if that country was Greece and the pacesetter was Germany, that was only going to be possible (if at all) with wrenching political and cultural change. That change might have been desirable, but to think that external discipline alone would be enough to set it in motion was a fatal conceit.
more at-
The Euro Endgame | The Weekly Standard
it just takes one to drop the euro, the rest will run like scolded cats.
lol
Spain and Italy CDS at all time highs right now.
Trajan
conscientia mille testes
- Thread starter
- #40
and here it is.....get over yourselves, lance the boil guys, and just end this.
Please Europe, either put up or break up
By Ambrose Evans-Pritchard Economics Last updated: August 5th, 2011
So we wait to see whether the ECB is really willing to sit back and let the whole edifice collapse.
Are the Bundesbankers really so stubborn that they would rather bring down the European financial system, tank the world economy, and cause a deep global depression, rather than enter the bond market on a sufficient scale to back-stop Italy and Spain?
Tough call. 50:50, I’d say.
The hardliners are seriously ideological people, and there seem to be some in the upper echelons of German policy-making (though obviously not the floundering bean-counter Schauble, or the battered Chancellor), who suspect that it might be better to lance the boil by forcing an immediate break-up of EMU.
I note that Belgium’s central bank governor Coene hinted that the ECB is withholding bond purchases to force Italy and Spain to push through – you guessed it – yet more growth-destroying austerity. Dangerous game. These 1930s deflationists really are a menace to society.
In a nutshell, unless the ECB is willing to step in – I mean really step in, not piss in the wind – until such a time as the revamped EFSF bail-out is ratified by all parliaments and is ready to take the baton (say November), and unless the EFSF itself is quadrupled in size and given a €2 trillion mandate without all the German-imposed ifs and buts, then the game is up.
If the EU authorities refuse to do this, it is best for everybody that it is recognized immediately and that arrangements are made for the orderly break-up of monetary union… not next year, or next month, but next week.
more at-
Please Europe, either put up or break up – Telegraph Blogs
Please Europe, either put up or break up
By Ambrose Evans-Pritchard Economics Last updated: August 5th, 2011
So we wait to see whether the ECB is really willing to sit back and let the whole edifice collapse.
Are the Bundesbankers really so stubborn that they would rather bring down the European financial system, tank the world economy, and cause a deep global depression, rather than enter the bond market on a sufficient scale to back-stop Italy and Spain?
Tough call. 50:50, I’d say.
The hardliners are seriously ideological people, and there seem to be some in the upper echelons of German policy-making (though obviously not the floundering bean-counter Schauble, or the battered Chancellor), who suspect that it might be better to lance the boil by forcing an immediate break-up of EMU.
I note that Belgium’s central bank governor Coene hinted that the ECB is withholding bond purchases to force Italy and Spain to push through – you guessed it – yet more growth-destroying austerity. Dangerous game. These 1930s deflationists really are a menace to society.
In a nutshell, unless the ECB is willing to step in – I mean really step in, not piss in the wind – until such a time as the revamped EFSF bail-out is ratified by all parliaments and is ready to take the baton (say November), and unless the EFSF itself is quadrupled in size and given a €2 trillion mandate without all the German-imposed ifs and buts, then the game is up.
If the EU authorities refuse to do this, it is best for everybody that it is recognized immediately and that arrangements are made for the orderly break-up of monetary union… not next year, or next month, but next week.
more at-
Please Europe, either put up or break up – Telegraph Blogs
Last edited:
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