Posts Tagged ‘Fitch’

     

 

 

Greek Government's Plan Rejected

It has turned out that the latest Greek plans in connection with the second bailout have essentially been rejected by the eurogroup. This hasn't kept the Greek government from claiming the exact opposite:

 

“Greek political leaders said they had clinched a deal on economic reforms needed to secure a second EU bailout, but euro zone finance ministers demanded more steps and a parliamentary seal of approval before providing the aid.

The EU and the International Monetary Fund are exasperated by a string of broken promises by Athens and weeks of disagreement over the terms of a 130 billion euro ($172 billion) bailout, with time running out to avoid a default. Finance ministers of the 17-nation euro zone meeting in Brussels warned there would be no immediate approval for the rescue package and said Athens must prove itself first.

Jean-Claude Juncker, who chairs the Eurogroup, set three conditions, saying the Greek parliament must ratify the package when it meets on Sunday and a further 325 million euros of spending reductions needed to be identified by next Wednesday, after which euro zone finance ministers would meet again.

"Thirdly, we would need to obtain strong political assurances from the leaders of the coalition parties on the implementation of the programme," Juncker told a news conference after six hours of talks in Brussels. "Those elements needs to be in place before we can take decisions."

"In short, no disbursement before implementation."

 

Read the rest of this entry »

     

 

 

Portucrumble, Act Two

On October 31 last year, we wrote an article entitled 'That Strange Currency'. At the time we opined that Portugal was set to become the 'next Greece'. This was after warning for several weeks that Portugal was the weakest link in the euro area crisis chain and likely to become the next major market focus. The denouement in Italy's bond market then intervened, but it appears that it is now indeed Portugal's turn in the barrel. We wrote:

 

„Meanwhile, the country we have for some time identified as the one markets are likely to focus on next has begun attract some media attention of late, as its economic fundamentals continue to deteriorate. As we noted previously, we don't see a whole lot of difference between Portugal and Greece – both nations suffer from a crushing debt burden and a dysfunctional banking system. As it turns out, the deposit base of Portugal's banking system has begun to shrink at an accelerated rate lately, in a manner reminiscent of Greece and indicating that a genuine money supply deflation is now underway in the country.“

Portugal's economy meanwhile is now expected to contract by a deeper than expected 2.8% next year. This has led to the announcement of further austerity measures, which in turn provoked the country's unions to threaten a general strike (a dynamic that is certainly reminiscent of Greece as well).“

Read the rest of this entry »

     

 

 

Fitched

These days, a currency can get Fitched. It happened to the euro yesterday, which admittedly is largely an unarmed opponent these days.

 


 

The euro seemingly can't catch a break – unless it's a break lower. On Wednesday some remarks by David Riley, Fitch's head of sovereign ratings, sent it careening lower – click chart for better resolution.

 


Read the rest of this entry »

     

 

 

Euro Area Bond Yields Rise Ahead of Auctions – While Germany Gets Paid For Borrowing Money

Euro area bond markets were under pressure again today, as a number of auctions loom next week. In addition, Austrian yields are still rising as an after-effect of the Hungarian crisis, although said crisis is in the process of abating after the parabolic moves in yields this week (more on this further below).

Read the rest of this entry »

     

 

 

Hungary Back At the Bailout Trough As Investors Go On Strike

Today Hungary's government came under renewed pressure, as yields on Hungary's government debt keep soaring and a treasury bill auction failed.

As Bloomberg reports:

 

„Hungary raised less than planned at a Treasury bill sale as yields soared  on concern the International Monetary Fund and European Union won’t resume aid talks.

The government sold 35 billion forint ($140 million) of one-year bills, 10 billion forint less than targeted, data from the Debt Management Agency, known as AKK, on Bloomberg show. The average yield rose to 9.96 percent, the highest since April 2009, from 7.91 percent at the last sale of the same-maturity debt on Dec. 22.

The cost of insuring Hungary’s debt through credit-default swaps reached an all-time high and the forint touched a record low versus the euro after aid negotiations stalled because of new laws that threaten to undermine the independence of the central bank. Hungary needs a deal as soon as possible and is ready to discuss the conditions, Tamas Fellegi, the minister assigned to lead the talks, told reporters today.

“Fellegi’s comments are aimed at providing reassurance, but I think the market will adopt a seeing-is-believing approach,” Timothy Ash, a London-based economist at Royal Bank of Scotland Group Plc, said in an e-mailed comment. “Market trust in this administration is now at rock bottom levels.”

Read the rest of this entry »

     

 

 

Banks Borrow Nearly €500 billion

Yesterday there were speculations all day long as to how big the new long term refinancing operation (LTRO) of the ECB would become. As the day wore on, the estimates tended to grow ever larger. We thought that the upper and of the seemingly more daring estimates would likely be hit and that is exactly what has happened. Regarding our thought process in connection with the ECB's policy, we have told our readers from the very day the new easing measures were announced that they should not be underestimated. We have frequently returned to the subject in recent days as the situation has evolved, noting that there was apparently an even bigger inflationary push in the works than hitherto thought. Note here that today's LTRO is only the first of two such operations and that in addition, banks will be able to pledge various other normally difficult to market credit claims with their national central banks in the euro system. As one friend of ours remarked in conversations in recent days (paraphrasing), 'this will significantly support the banks and sovereigns in those countries where the primary vector of contagion is from the banks to the sovereign' –  such as is for instance the case in Spain.  Readers may recall that we have since last year always stressed that in Spain, the banking system and the cost of cleaning it up in the middle of a depression presents an enormous problem for the government.

Read the rest of this entry »

     

 

 

Euro Area Credit Market Charts

Below is our customary collection of CDS prices, bond yields, euro basis swaps and several other charts. Both charts and price scales are color coded (readers should keep the different scales in mind when assessing 4-in-1 charts). Prices are as of Thursday's close.  

In the wake of market disappointment over ECB president Mario Draghi's continued refusal to countenance monetization of euro area government bonds, yields and CDS prices once again shot up sharply in trading on Thursday, taking back a little more of the recent improvement.

Whether this rebound will lead to fresh highs in yields and CDS remains to be seen and will largely depend on how the markets receive the results of the ongoing euro-group summit.

Read the rest of this entry »

     

 

 

US Banking System In Trouble

Before we begin with today's brief update, we want to wish a Happy Thanksgiving to our US readers.  On this occasion, we also wish to extend our sympathy to the countless turkeys that will lose their lives today. Sorry birdies, but that is what you are for. Read the rest of this entry »

     

 

 

Papandreou Calls For Referendum On Bailout

Embattled Greek prime minister Papandreou has found a way to stick it to the eurocrats in a most elegant manner: instead of continuing to serve as everyone's favorite whipping boy, he has decided it is time to let the Greek people themselves speak out on the future of their country. In a surprise announcement yesterday, he told parliament that Greece is to hold its first referendum since 1974 and that the population would be asked whether it wants to accept the conditions of the bailout plan or not. Read the rest of this entry »

     

 


It's Still Hailing Downgrades

Tuesday saw Europe hit by another slew of downgrades. Moody's followed Fitch and S&P and downgraded Spain – by two notches. As reported by DailyFX:


„In its rationale for the downgrade and negative outlook, Moody’s cited the absence of a solution for the European debt crisis and the worsening economic outlook for Spain. The agency lowered its forecast of 2012 GDP growth from 1.8 percent to 1 percent on continued softness in the labor market and “the difficult funding situation for the banking sector.” While acknowledging Madrid’s efforts to reform the labor market and introduce a balanced-budget constitutional amendment, Moody’s expressed “serious concerns” about regional government deficits and voiced doubt about the general government sector’s ability to meet “ambitious” fiscal targets.“

 

(emphasis added)

  Read the rest of this entry »

     

 

 

No Quick Fix Is In Sight

As we have pointed out yesterday , after the recent G-20 meeting a number of truly fantastic proclamations made the rounds. Imaginations were evidently running wild.

'G-20 Welcomes Progress on EU Debt Plan' the Wall Street Journal shouted out for example. What progress? What 'debt plan'? As we have noted – and this has since been echoed by other observers – there actually is no plan. There is not even a plan to make a plan, but something that is still one step further removed and terrifyingly vague. There are certainly plenty of ideas, but every one of them is in danger of being shot down by one or more of the 17 players comprising the euro area.

Read the rest of this entry »

     

 

 

It's Still Raining Downgrades

Last week was chock-full of fresh downgrades of major European banks and incidentally also brought more grief for a major European country and prominent member of the PIIGS stable – Spain – which received the second downgrade within a week.

This didn't keep stock markets from going higher. After all, we now have vague 'hopes' that 'something' will be done. As we noted last week, it's a bit like an IPO prospectus from the South Seas bubble. Something is going to happen, and nobody knows what it is…but it will be to everybody's 'great advantage'. As far as we can tell, there's definitely a plan to make a plan to make a plan. Said plan (the first one in the row) is still in its gestating stages and once it has ripened into the last one in the row unlikely to tackle the core problem, but who cares about such details when there's a rally on?

Read the rest of this entry »

Most read in the last 20 days:

  • French labour union workers and students attend a demonstration against the French labour law proposal in Marseille, France, as part of a nationwide labor reform protests and strikes, March 31, 2016. REUTERS/Jean-Paul Pelissier/File PhotoHow the Welfare State Dies
      Hollande Threatens to Ban Protests Brexit has diverted attention from another little drama playing out in Europe. As of the time of writing, if you Google “Hollande threatens to ban protests” or variations thereof, you will find Russian, South African and even Iranian press reports on the topic. Otherwise, it's basically crickets (sole exception: Politico).  Gee, we wonder why?   They don't like him anymore: 120.000 protesters recently turned Paris into a war zone. All...
  • offendFree Speech Under Attack
      Offending People Left and Right Bill Bonner, whose Diaries we republish here, is well-known for being an equal opportunity offender  - meaning that political affiliation, gender, age, or any other defining characteristics won't save worthy targets from getting offended. As far as we are concerned, we generally try not to be unnecessarily rude to people, but occasionally giving offense is not exactly beneath us either.   The motto of the equal opportunity...
  • The-answer-is-yesToward Freedom: Will The UK Write History?
      Mutating Promises We are less than one week away from the EU referendum, the moment when the British people will be called upon to make a historic decision – will they vote to “Brexit” or to “Bremain”? Both camps have been going at each other with fierce campaigns to tilt the vote in their direction, but according to the latest polls, with the “Leave” camp’s latest surge still within the margin of error, the outcome is too close to call.   The battle lines are...
  • water houseA Market Ready to Blow and the Flag of the Conquerors
      Bold Prediction MICHAELS, Maryland – The flag in front of our hotel flies at half-mast. The little town of St. Michaels is a tourist and conference destination on the Chesapeake Bay. It is far from Orlando, and even farther from Daesh (a.k.a. ISIL) and the Mideast.   St. Michaels, Maryland – the town that fooled the British (they say, today). Photo credit: Fletcher6   Out on the river, a sleek sailboat, with lacquered wood trim, glides by, making hardly a...
  • nails-in-a-bed-of-nails-new-yorker-cartoonGoing... Going... Gone! The EU Begins to Splinter
      Dark Social Mood Tsunami Washes Ashore Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers – if memory serves, the biggest nominal intra-day gain ever recorded (with the possible exception of one or two days in early 1980). Here is a picture of Haruhiko Kuroda in front of his Bloomberg monitor this...
  • queen_gold-840x501Rule Britannia
      A Glorious Day What a glorious day for Britain and anyone among you who continues to believe in the ideas of liberty, freedom, and sovereign democratic rule. The British people have cast their vote and I have never ever felt so relieved about having been wrong. Against all expectations, the leave camp somehow managed to push the referendum across the center line, with 51.9% of voters counted electing to leave the European Union.   Waving good-bye to...
  • MACAU, CHINA - JANUARY 28: Buildings of Macau Casino on January 28, 2013, Gambling tourism is Macau's biggest source of revenue, making up about fifty percent of the economy.What Could Possibly Go Wrong?
      A Convocation Of Gamblers The Wall Street Journal and BloombergView have just run articles on the shadow banking system in China.  This has put me in a nostalgic mood. About 35 years ago when I was living in Japan, I made a side trip to Hong Kong.   Asia's Sin City, Macau Photo credit: Nattee Chalermtiragool   I took the hydrofoil to Macau one afternoon and the same service back early the next morning.  On the morning trip, I am sure that I saw many of the...
  • junkThe Problem with Corporate Debt
      Taking Off Like a Rocket There are actually two problems with corporate debt. One is that there is too much of it... the other is that a lot of it appears to be going sour.   Harvey had a good time in recent years...well, not so much between mid 2014 and early 2016, but happy days are here again! Cartoon by Frank Modell   As a brief report at Marketwatch last week (widely ignored as far as we are aware) informs us:   “Businesses racked up debt in the...
  • saupload_loves-me-loves-me-notA Darwin Award for Capital Allocation
      Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy.  The inputs are too vast.  The relationships are too erratic.   The economy - complex and ever-changing interrelations. Image credit: Andrea Dionne   Quite frankly, keeping tabs on it all is beyond human capacity.  This also goes for the federal government.  Even with all their data gatherers and...
  • rate_hike_cartoon_10.15.2015_largeJanet Yellen’s $200-Trillion Debt Problem
      Blame “Brexit” BALTIMORE – The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap.   “Investors” are pushing the DJIA back up again..apparently any excuse will do at the moment. The idea may backfire though, as exactly the same thing happened...
  • deflated-souffleThe Fed’s  Doomsday Device
      Bezzle BALTIMORE –  Barron’s, in a lather, says the market is facing the “Two Horsemen of the Apocalypse.” Huh?   Only two? There were four last time!   Supposedly, the so-called Brexit – the vote in Britain this Thursday on whether to leave or remain in the European Union (EU) – and uncertainty over where the Fed will take U.S. interest rates are cutting down stocks faster than a Z-turn mower. But Brexit is a side show. As our contacts in London...
  • Brexit supporterGold and Brexit
      Going Up for the Wrong Reason Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use.   August gold contract, daily – gold has been strong of late, but this seems to be driven by “Brexit” fears - click to enlarge.   Moreover, insuring against Brexit might ironically be equivalent...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com