Posts Tagged ‘Société Générale’

     

 

 

The EU Summit Agrees on the Well-Intentioned, but Ultimately Meaningless and Unenforceable 'Fiscal Compact'

The Czechs and Brits seem to be the only ones who can clearly see where the HMS EU Titanic is now heading. Or let us rather put it this way: they are perhaps not the only ones who can see where it is heading (toward the proverbial iceberg),  but they have turned out to be the only ones who – for now anyway – refuse to take part in this perilous journey.

We are slightly surprised that not more of the former Eastern European command economies have jumped ship. After all, the path the EU is now on – toward increased centralization and rule by faceless bureaucrats with little democratic accountability – is fatally reminiscent of the organization they once were involuntary members of, the COMECON of yore (Совет экономической взаимопомощи, pronounced: 'soviet ekonomicheskoy vsaymopomoshchi' – the 'Council for Mutual Economic Assistance').

Read the rest of this entry »

     

 

 

Fitch Strikes Again

Following on the heels of the recent euro area downgrades by S&P, Fitch has now also issued several new downgrades. While this has not been unexpected, it further complicates the efforts to bring the crisis under control. Of course one must always keep in mind that these downgrades are only belated confirmations of what the markets have long ago recognized and priced in already. The only new problems raised by such downgrades come from indexation and the rules governing the fiduciary responsibilities of certain institutional investors. Investors who allocate their bond investments by the weightings that such bonds have in bond indexes are forced to sell bonds that are removed from indexes due to rating changes – this is one of the effects currently plaguing Portugal's bond market.

This in turn then forces clearing firms such as LCH Clearnet to alter the margin respectively haircut requirements of the bonds concerned in repo transactions, if their spread over the benchmark (a mixture of several AAA rated euro area government bonds) increases beyond a certain minimum threshold.

Read the rest of this entry »

     

 

 

Credit Market Watch, January 26

Below is our customary collection of charts updating the usual suspects: CDS spreads, bond yields, euro basis swaps and a few other charts. 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 Wednesday's close.

While most moves in these markets have been rather unremarkable lately, one must keep a close eye on what is happening in view of the chock-full 'event calendar' in the euro area over coming weeks.

Most euro area sovereign CDS and bond yields  have seen a little bounce yesterday, but the most notable moves are still occurring in CDS and yields on Portuguese government debt. As mentioned yesterday, Portugal is now clearly in the market's crosshairs. This is partly a result of the Greek debt fiasco, but mostly it is due to the somewhat belated realization that even in the wake of recent economic reforms, Portugal will simply not be able to cope with its debt as envisaged in the original bailout package. 

Portugal's prime minister has pleaded for more time: if only the markets would give him time, or the EU somehow arranged to give him enough time, all would be well. Alas, time is in short supply these days. The markets no longer believe it will make a difference. In fact, the belief is probably that over time, things are bound to still get worse, given the recent economic downturn.

As laudable as for instance Portugal's recent labor market reforms are, they have been put in place a year or two too late.

 

Read the rest of this entry »

     

 

 

Credit Markets Chart Update, January 25

Below is our customary collection of charts updating the usual suspects: CDS spreads, bond yields, euro basis swaps and several other charts. Charts and price scales are color coded (readers should keep the different scales in mind when assessing 4-in-1 charts). CDS prices are as of Tuesday's close, except yields and basis swaps which are as of today.

Credit conditions in euro-land continue to ease across the board, with the notable exception of Portugal.

Also, one of the Middle Eastern CDS spreads that have broken out recently continues to march higher, namely CDS on Bahrain. Bahrain is under Sunni rule, but has a Shi'ite majority population. This could create complications in the context with the recent confrontation between the West and Iran.

Read the rest of this entry »

     

 

 

Goodbye, Upbeat Tone?

After the S&P downgrade of nine euro area sovereigns late last week and the fact that Greece's debt negotiations have stalled, Reuters reports today on the sudden absence the more optimistic tone that followed recent successful debt auctions and falling yields for Italy and Spain.

 

Read the rest of this entry »

     

 

 

Armageddon Averted? Not So Fast.

Mario Draghi was eager yesterday to point out that the measures taken by the ECB have 'avoided an imminent credit crunch' in the euro area and pointed to the decline in various government bond yields as a measure of success.

Italy sold € 12 billion of bills yesterday, at the upper end of the target range and at a far better yield than on occasion of the last sale, seemingly underscoring Draghi's assertions.

Read the rest of this entry »

     

 

 

Euro Area Credit Market Charts

Below is our customary collection updates of the usual suspects: CDS spreads, 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). CDS prices are as of Friday's close, bond yields and basis swaps  are as of today's close (Bloomberg updates of CDS are always a bit late).

Read the rest of this entry »

     

 


Moody's Gets Sentimental Over Austria

The normally hard-hitting credit rating agency Moody's, widely despised and feared among governments in the euro area, just reaffirmed the 'AAA' rating of  the 'island of the blessed' as it is ironically known among its inhabitants, the picturesque Socialist Republic of Austria. Moody's has it right insofar as it can of course never be said that there is a crisis in Austria as long as the supply of 'Mozartkugeln' remains secure.

Read the rest of this entry »

     

 


Euro Area Credit Market Charts

Further 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 Friday's close.

Friday saw some improvement in Spain's bond yields, and a slight rise in Italy's. These are currently probably the most important government bond yields in the world. CDS on Spain and Italy have come in a bit as well, but at 419 and 542 basis points respectively remain uncomfortably elevated.  Yields on the  bonds of the euro area's 'AAA club' generally improved strongly last week, in spite of the rising probability of ratings downgrades (see Austrian yields below as an example, French 10 year yields also declined by about 30 basis points last week). Euro basis swaps improved strongly.

Read the rest of this entry »

     

 


Another Bad Auction

Yesterday, Italy held an auction of five year bonds that contrary to Spain's auction on Tuesday went far less smoothly. Although the range of the amount to be sold was picked to be very small – only €2 to € 3 billion – and the amount sold came in at the top end of this range, Italy once again had to pay a new euro-era record high in yields.

Read the rest of this entry »

     

 

 

Selling the 'Crown Jewels'

Bloomberg had an interesting report on the actions taken by euro area banks to bring their leverage down and meet the new tougher capital requirements. Apparently the banks are mainly selling foreign assets and due to the current negative market conditions are forced to sell the very assets that are their best performing ones. This will ultimately leave them considerably weaker, as the remaining assets on their books are by necessity of much lower quality.

Read the rest of this entry »

     

 


Euro Area Credit Market Charts Update

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 Monday's close.  

As we noted in yesterday's update, markets were expressing severe disappointment on Monday as various assessments of the latest euro area deal began to trickle in. Consequently, there were big moves higher in CDS prices and bond yields.

Read the rest of this entry »

Most read in the last 20 days:

  • How to Buy Low When Everyone Else is Buying High
      When to Sell? The common thread running through the collective minds of present U.S. stock market investors goes something like this: A great crash is coming.  But first there will be an epic run-up climaxing with a massive parabolic blow off top.  Hence, to capitalize on the final blow off, investors must let their stock market holdings ride until the precise moment the market peaks – and not a moment more.  That’s when investors should sell their stocks and go to...
  • What Kind of Stock Market Purge Is This?
      Actions and Reactions Down markets, like up markets, are both dazzling and delightful. The shock and awe of near back-to-back 1,000 point Dow Jones Industrial Average (DJIA) free-falls is indeed spectacular. There are many reasons to revel in it.  Today we shall share a few. To begin, losing money in a multi-day stock market dump is no fun at all.  We'd rather get our teeth drilled by a dentist.  Still, a rapid selloff has many positive qualities.   Memorable moments from...
  • Monetary Metals Brief 2018
      Short and Long Term Forecasts Predicting the likely path of the prices of the metals in the near term is easy. Just look at the fundamentals. We have invested many man-years in developing the theory, model, and software to calculate it. Every week we publish charts and our calculated fundamental prices.   A selection of 1 and ½ ounce gold bars – definitely more fondle-friendly than bitcoin, but a bit more cumbersome to send around. [PT]   However, predicting the...
  • US Stocks - Minor Dip With Potential, Much Consternation
      It's Just a Flesh Wound – But a Sad Day for Vol Sellers On January 31 we wrote about the unprecedented levels - for a stock market index that is - the weekly and monthly RSI of the DJIA had reached (see: “Too Much Bubble Love, Likely to Bring Regret” for the astonishing details – provided you still have some capacity for stock market-related astonishment). We will take the opportunity to toot our horn by reminding readers that we highlighted VIX calls of all things as a worthwhile...
  • Why I Own Gold and Gold Mining Companies – An Interview With Jayant Bandari
      Opportunities in the Junior Mining Sector Maurice Jackson of Proven and Probable has recently interviewed Jayant Bandari, the publisher of Capitalism and Morality and a frequent contributor to this site. The topics discussed include currencies, bitcoin, gold and above all junior gold stocks (i.e., small producers and explorers). Jayant shares some of his best ideas in the segment, including arbitrage opportunities currently offered by pending takeovers – which is an area that generally...
  • When Budget Deficits Will Really Go Vertical
      Mnuchin Gets It United States Secretary of Treasury Steven Mnuchin has a sweet gig.  He writes rubber checks to pay the nation’s bills.  Yet, somehow, the rubber checks don’t bounce.  Instead, like magic, they clear. How this all works, considering the nation’s technically insolvent, we don’t quite understand.  But Mnuchin gets it.  He knows exactly how full faith and credit works – and he knows plenty more.   Master of the Mint and economy wizard Steven Mnuchin and...
  • “Strong Dollar”, “Weak Dollar” - What About a Gold-Backed Dollar?
      Contradictory Palaver The recent hullabaloo among President Trump’s top monetary officials about the Administration’s “dollar policy” is just the start of what will likely be the first of many contradictory pronouncements and reversals which will take place in the coming months and years as the world’s reserve currency continues to be compromised.  So far, the Greenback has had its worst start since 1987, the year of a major stock market reset.   A modern-day...
  • Seasonality of Individual Stocks – an Update
      Well Known Seasonal Trends Readers are very likely aware of the “Halloween effect” or the Santa Claus rally. The former term refers to the fact that stocks on average tend to perform significantly worse in the summer months than in the winter months, the latter term describes the typically very strong advance in stocks just before the turn of the year. Both phenomena apply to the broad stock market, this is to say, to benchmark indexes such as the S&P 500 or the...
  • The Future of Copper – Incrementum Advisory Board Meeting Q1 2018
      Copper vs. Oil The Q1 2018 meeting of the Incrementum Fund's Advisory Board took place on January 24, about one week before the recent market turmoil began. In a way it is funny that this group of contrarians who are well known for their skeptical stance on the risk asset bubble, didn't really discuss the stock market much on this occasion. Of course there was little to add to what was already talked about extensively at previous meetings. Moreover, the main focus was on the topic...
  • US Equities – Retracement Levels and Market Psychology
      Fibonacci Retracements   Following the recent market swoon, we were interested to see how far the rebound would go. Fibonacci retracement levels are a tried and true technical tool for estimating likely targets – and they can actually provide information beyond that as well. Here is the S&P 500 Index with the most important Fibonacci retracement levels of the recent decline shown:   So far, the SPX has made it back to the 61.8% retracement level intraday, and has weakened...

Support Acting Man

Item Guides

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

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

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]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com