Consequences Of The “SD” Rating For Greece By S&P
Probably none. In a normal world, the ECB wouldn’t finance positions for banks that were rated D or SD. But since the ECB is behind the whole deal and is doing everything for banks, any actual rule prohibiting that will be amended immediately if it hasn’t already been (there was a time the ECB would […]
The PPT Must Have Thought We Had Moved To Daylight Savings
Time and left at 3pm after trying to ramp it up then. Weird day. The morning drop seemed overdone based on “fears” of a German vote against the ECB/Bank bailout using Greece as a conduit for the money. The vote was strongly in favor which made markets happy, though someday maybe someone will present an […]
FT Alphaville: ISDA Greece Credit Event Around Here?
Personally I don’t think it will be a Credit Event at this stage. They have tried to make the new ECB bonds as similar as possible to the old bonds. Is not being subjected to a law the same as being made senior? I think it is worth a shot, but not sure it wins. […]
(BN) *MERKEL SAYS GERMANY MAY PAY EU11 BLN INTO ESM THIS YEAR
In another day where the market sold off briefly on concerns about Greece, but has now gone back to rallying (at least until the European close), this little line deserves more attention. For all the hype about ESM having “paid-in” capital – it doesn’t. It has more than EFSF (which is at zero), but still […]
Less Than 10 Billion Euro Of March 20th Bonds Oustanding?
Under the “designated” securities section of the Greek PSI offer, the principal amount outstanding is 9.77 billion. With 14.4 billion allegedly outstanding, that means the ECB owned 4.7 billion of these bonds. The ECB intends to get paid at par on these? With these bonds trading at about 25%, that is 3.5 billion euro of […]
Greek PSI Update
So far, the PSI has become more confusing, rather than less confusing. The official Greek PSI website now requires a variety of “confirmations” to proceed to the “invitations”. So while waiting for the lawyers to figure out how to “check the boxes” it is actually harder to get information from the government on what is […]
The Placebo Effect
The “Placebo Effect” is fascinating. In a typical drug testing trial, one group of patients will receive the actual drug being tested, and a “control” group will be given an “inert” medicine (or “sugar pill”) that shouldn’t do anything for the patient, but the patient doesn’t know that. So much of what I find wrong […]
G-20, PSI, PMI And LTRO
The G-20 has come and gone. Nothing particularly positive happened, but since the market prefers to go higher on rumors of China throwing money at Europe, it keeps that option open. The G-20 and IMF seem to want the bankrupt countries of Europe help themselves more before they will provide them with lots of new […]
The ECB’s Bailout Of The ECB
We finally saw the PSI details – the press release itself was confusing about how Greece will proceed once the participation rate is known, but nothing about the terms were new. In the meantime a lot of “new” bonds have been created. These must be the bonds that the ECB owns. The amount the ECB […]
Bullard, Plosser, And Dudley Seem To Be Talking Down The Prospects For More QE
Not that Bullard and Plosser are currently voting members, but it is interesting to see if the Fed is toning it down a bit. I believe that the closer we get to election time, the more difficult it will be for them to implement a new program without significant deterioration in the data. For a […]
