(BN) *FILLON SAYS FRENCH DEFICIT WILL BE 4.5% IN 2012
So when exactly are they getting to the “balanced budget”? This is just a useful reminder how far away they are from delivering on the “compact” they cobbled together on Thursday. A 4.5% deficit in 2012 and 91 day bills issued by EFSF. Like every other summit, the follow up on the vague promises will […]
Greece – No PSI
As expected banks couldn’t agree to a haircut. Now Greece, the EU, the IMF, and taxpayers, will pay out about about $11 billion of principal and interest before the end of the year. I don’t know who holds the bonds maturing this year, but some of that money is probably finding its way into banks […]
EFSF Issues 91-Day Bills
The market popped after the EFSF announced completion of a sale of just under 2 billion euro of 91-day bills. The good news I guess is that it came at the ultra low yield of 0.22%. Why are they doing 91-day bills for EFSF? The point of EFSF is to address the liquidity part of […]
French Downgrade – Even More Likely Than Yesterday
First Moody’s and now Fitch are coming out with negative comments about the summit. That provides mores more air cover for S&P to downgrade France 1 notch. Normally I don’t care that much about ratings (they are a lagging indicator) except when they can create forced selling. I didn’t think cutting the US ratings would […]
Will The US De-Couple? Or Is It Time To Re-Couple?
Maybe, but not in the way everyone seems to think. Haven’t we already decoupled? YTD stock returns in the US are 0% for the S&P and Nasdaq, and the Buffet owned DJIA is actually up 5%. Euro Stoxx 50 is -18% YTD with Germany outperforming and Italy underperforming (it is basically the same performance whether […]
Nothing New To Add To What We Have Already Said
We continue to focus on confirmation that ECB won’t print, which will weigh on the market, and negative rating actions, which could be very bad if France gets hit. The IMF may pull off a surprise if it gets some new non European money, but that hope is also diminishing. Rather than going into more […]
Harry Potter, Twilight, And The EU
Neither Harry Porter nor the Twilight series felt that one movie could bring proper closure, so both did the “final movie” in 2 parts. The EU has adopted that tradition and is already pushing the focus to the next Summit in March which really will be the grand finale. They also seem to have stolen […]
Basis Unwind Or The BSC Trade?
(BN) BNP Paribas Sold $2 Billion Swaps on France, EBA Says (1) This is the headline of the story below. Is this the basis unwind we predicted after the October 27th summit where banks were going to be forced to restructure debt without triggering CDS? (It hasn’t happened yet, but that’s another story). So if […]
A Couple Quick Points…
The ESM primer is useful to read, but it is far less impressive than the headline would make you believe. On central bank loans to the IMF back to the countries, is that a ploy so that the IMF can get seniority over existing bondholders and gain direct control over budgets? I’ve been confused why […]
ESM – A Primer: Not So Big, And Not So “Paid-In”
So the ESM is going to be implemented ahead of schedule. Or at least that is the current plan, although it seems that Finland is insisting that it retains unanimous voting and most (all?) countries still need to ratify it. The ECB will oversee the ESM and EFSF, which is good as they have more […]