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:

  • US Financial Markets – Alarm Bells are Ringing
      A Shift in Expectations When discussing the outlook for so-called “risk assets”, i.e., mainly stocks and corporate bonds (particularly low-grade bonds) and their counterparts on the “safe haven” end of the spectrum (such as gold and government bonds with strong ratings), one has to consider different time frames and the indicators applicable to these time frames. Since Donald Trump's election victory, there have been sizable moves in stocks, gold and treasury bonds, as the election...
  • Modi’s Great Leap Forward
      India’s Currency Ban – Part VIII India’s Prime Minister, Narendra Modi, announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender. Linked are Part-I, Part-II, Part-III, Part-IV, Part-V, Part-VI and Part-VII, which provide updates on the demonetization saga and how Modi is acting as a catalyst to hasten the rapid degradation of India and what remains of its institutions.   India’s Pride and Joy   Indians are...
  • Global Recession and Other Visions for 2017
      Conjuring Up Visions Today’s a day for considering new hopes, new dreams, and new hallucinations.  The New Year is here, after all.  Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad.  But what else will happen?   Image of a recently discarded vision... Image by Michael Del Mundo   Here we begin by closing our eyes and slowing our breath.  We let our mind...
  • The Great El Monte Public Pension Swindle
      Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years.  There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island.  El Monte, California, is one of those places.   Advice dispensed on Interstate...
  • A Trade Deal Trump Cannot Improve
      Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things.   Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
  • Pope Francis Now International Monetary Guru
      Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated.   Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
  • Where’s the Outrage?
      Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous.  The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class.  In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid.  Believe me.  I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
  • Trump’s Trade Catastrophe?
      “Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute -  Larry Summers is wrong about almost everything. Could he be right about this?   Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
  • Trump’s Plan to Close the Trade Deficit with China
      Rags to Riches Jack Ma is an amiable fellow.  Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl.  At a moment of peak inspiration, he executed his first search engine request by typing in the word beer.   Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
  • Side Notes, January 14 - Red Flags Over Goldman Sachs
      Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold.   The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...
  • Money Creation and the Boom-Bust Cycle
      A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote:   I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
  • Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
      Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action.   Photo via thedailycoin.org   The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices.   Prices of gold and silver...

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