The EFSF First-Loss Insurance Is A Truly Unique Vehicle
[Revised November 3, 2011] There are still a lot of details to be worked out, but the €250 – €275 billion EFSF first loss insurance facility is starting to take shape. The amount of exposure that the EFSF can take in any form and retain the AAA rating is capped at €452 billion Euro – […]
For A Nation That Obsessed With What “Is” Is, We Can Now Wonder What “Net” Is
One of the consequences of MF Global and the whole PSI in Europe is that investors are less trusting about what “net” is. The “gross” positions are about 2.6 billion. That is across Europe. If they are long and short all sorts of German and French government bonds in their role as market maker, that […]
(BN) *GREECE BAILOUT REFERENDUM HAS BEEN SCRAPPED: AP
Rally back on, we have managed to keep any decisions out of the hands of the citizens. Democracy at its finest. +——————————————————————————+ BN 11/03 14:41 *GREECE BAILOUT REFERENDUM HAS BEEN SCRAPPED: AP +——————————————————————————+ Greece Bailout Referendum Has Been Scrapped: AP 2011-11-03 14:43:09.706 GMT By Andrew Cinko Nov. 3 (Bloomberg) — Officials close to Greek prime […]
(BN) *DRAGHI SAYS EXIT OF ANY NATION FROM EURO `NOT IN THE TREATY’
But didn’t Merkozy say that Greece was in or out? I’m hearing from a lot of traders (myself included) that this has all just become too confusing to figure out. Liquidity is abysmal. Can Greece default, wipe out the debt, and stay in the Euro? The IIF has taken the time to say that the […]
I’m Not Sure What This Means, But The Euro Basis Swap Just Hit
I’m not sure what this means, but the Euro basis swap just hit a new low for this crisis. Maybe it will just take time to catch up, maybe it is a sign that the rate cut isn’t transferring through the system (yet). We have moved 40 points on the SPX from the overnight lows to the […]
ECB Rate Cut
The ECB finally came through with a rate cut. We have been expecting one as it is the last chance to keep yields down on sovereign debt in Europe. I wouldn’t be surprised if the failed EFSF auction yesterday influenced the timing. Maybe cutting the ECB rates will cause a shift in the curve, making […]
Greece – Eurozone Or Not? Slavery Or Freedom?
At this moment, the headlines coming out of Greece are confusing and contradictory. It isn’t clear whether or not there will be a referendum or a vote of no confidence. There may be a new leader, there may not be. All we can do is wait for the next headline. In the end I think […]
(BN) *S&P: ‘ALMOST CERTAIN’ EFSF’S AAA GOVS TO PROVIDE NEEDED SUPPORT
So the details boil down to this – the AAA guarantors cap the size of exposure the EFSF can take. So the EFSF can borrow, insure, guarantee, or otherwise take on risk up to about 452 billion. So now we know the size has been constrained by the AAA guarantors. It seems like some of […]
Grade 3 Math Assignment
Tom has 1 apple. Tom has promised to give Robbie, Jim, Anne and Mary, half an apple each. How does Tom get 4 half apples from 1 apple? Bonus Question: While Robbie, Jim, Anne, and Mary are waiting for their half apple, Tom gets hungry and takes a couple bites out of the apple. How […]
Default, Credit Event, And Too Big to Fail
It looks like Fitch would declare a 50% write-down a default. And yes, it is a default. No matter how anyone wants to spin it – restructuring, PSI, etc., it is definitely a default. It is NOT a Credit Event. Maybe the name should be changed from Credit Default Swaps to Credit Event Swaps because […]