(BN) Euro-Rescue Fund To Issue New Short-Term Bonds In December
I am really not sure how this is good news. Is there any doubt that the EFSF could issue short-dated paper at low yields? No. What does this do? Keeps cost of funds down, but not sure how you leverage this – you can’t. Second loss risk couldn’t be based on short-dated first loss risk. […]
We Are All Fx Traders Today
The correlation between SPX and EUR has been high, but it seems to have hit unprecedented levels today. All you need to know is where EUR is and you can pretty much nail where treasuries, SPX, and an assorted number of other assets are. The connection and how program driven the market has become is […]
(BN) Finland Must Clarify Bailouts to Lawmakers, Audit Committee Says
I think this is an interesting story. Finland was the first to demand “collateral” for continuing to play the bailout game. It is debatable whether they are getting good collateral or not, but it looks like they are the first government to really focus on what all the guarantees and other commitments may cost them. […]
(BN) European Stocks Drop as ECB’s Knot Says Can’t Do ‘Much More’
He admits rate cuts do very little in this situation. Admits that intervention has limited and short term impact. Will he be allowed to speak again? So truthful yet contradictory to what everyone wants to believe. I doubt it is a co-incidence that he is Dutch. Another story floating around about transitioning from EFSF to […]
To Ecb Or Not To Ecb That Is The Only Question
Europe started the day poorly, following up on the weak close and its own poor economic data. Then the ECB got involved and started buying Spanish and Italian debt aggressively. Rumors is that the ECB will have unlimited buying power for Italian debt once the austerity bill is passed. The current buying spree is completely […]
Tranched EFSF – Or TARP Lite
The EU is getting closer to having two actual alternatives for EFSF on the table. Partial Protection Certificate (PPC) The PPC approach is included as one of the two proposals. They came up with a name so that is progress. It looks like payout would be linked to events that are very similar to CDS […]
(CRL) EFSF Terms of Reference on Maximizing Capacity: EFSF
Seriously, they should just print. Print, accept that nothing other than printing money will avoid a lot of defaults, print, accepting that the consequences are unknown, but this seems “unlikely” to work at best. I think the latest iteration is a “TALF” except that on a single asset, all you are doing is allocating the […]
Is 6% The Point Of No Return?
With Italian 10 year bonds crossing the 6% yield threshold, it is worth seeing how other bonds behaved. For Greece, the chart starts on September 4th, 2009, and it first crossed the 6% threshold in the week of January 15th, 2010. For Ireland, the graph starts on May 7th, 2010 (right before the original bailout) […]
(BN) *EU MAY MONITOR CURRENT ACCOUNT, 9 OTHER ECONOMIC INDICATORS
Ahhh, problem fixed, thank goodness we are in good hands. All I can think is “a day late, and a dollar short”. Rehn and Juncker are getting more funny than Renn and Stimpy. We were supposed to have a plan in place by now. I am sure their “draft” proposal has a lot more than […]
(BUS) *JEFFERIES REDUCES GROSS HOLDINGS OF SOVEREIGN DEBT OF PIIGS
They seem to be doing everything right and showing that they will do what it takes to keep their customers. They reported their positions over the weekend (I looked at them Saturday). They seemed in line with a “market making” book – at least one that Volcker hadn’t got his hands on. The “gross notionals” […]
