The BillyB, Aster & JR8 roundtable!

[JR8]

Delia, you dirty daily mail reader. Shame on you!!

Bunter, honky-tonks, I'll read just about anything that is not hidden behind a pay-wall.

[JR8]

Contagion anyone?
=====================


Ireland May Be Next to Face Junk After Portugal

Ireland’s credit rating may be cut to junk by Moody’s Investors Service after Portugal yesterday lost its investment grade rating, according to analysts.

...
Ireland has been locked out of markets since September, and the yield on 10-year Irish bonds climbed to 12.44 percent today, a euro-area record for the country that agreed to a rescue package with the European Union and International Monetary Fund last November.

“If not re-entering the public funding markets has significance for a sovereign’s rating, then clearly if our view proves correct, then Ireland will suffer an imminent downgrade,”

[JR8]

''It seems strange that there is not a single rating agency coming from Europe,' he [Barroso] said.

'It shows there many be some bias in the markets when it comes to the evaluation of specific issues of Europe.

'There are some possible developments regarding the possibility of creating ratings agencies originating in Europe.'

Yep and there you have it folks. President Barroso of the EU politburo (aka European Commission) has declared war on the ratings agencies. I have a feeling he believes they are all American and so 'it's business as usual' in their repugnantly hypocritical multi-millionaire-'socialist-grandee'-capitalist-hating milieu.

Perhaps he has not considered that such intemperate remarks might be considered ill-founded by the markets. You know, it might make matters worse. Just maybe you complete numb-nuts?

Well what do you know? Fitch Ratings are French lol!

Yes folks. The EU really is being run by complete morons like this!

[JR8]

'The ECB raised its benchmark lending rate to 1.50pc from 1.25pc in an effort to keep a lid on eurozone inflation, which currently stands at 2.7pc.
...
Though higher rates may be necessary for a potentially overheating economy like Germany's, they are likely to add to the growth concerns of some of the eurozone's more indebted nations, such as Greece and Portugal.
'
http://www.telegraph.co.uk/finance/econ ... d-low.html


Raising ECB interest rates will help Germany, which benefits from others, with it's artificially constructed currency, but it is a (further) kick in the balls to the PIGS which are in depression and default.

But in the EU scheme of things that's not a priority is it? Southern Europe (and Ireland) are being hung out to dry for the folly and impossible arrogance of the north.

Deutschland uber alles!

p.s.

Barroso you Marxist buffoon, we salute you right back.

[JR8]

News in of another intellectual titan of EU politics and finance.


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'On Friday, the eurozone's debt crisis intensified, amidst the first serious signs that "fiscal contagion" is spreading to Italy. Domestic political tensions – with Silvio Berlusconi, Italy's ludicrous prime minister, attacking the finance minister, Giulio Tremonti – caused Italian bond yields to leap to a nine-year high. Without Tremonti to rein him in, Berlusconi would surely show the same irresponsibility towards Italy's finances as he has in so many other aspects of his so-called leadership. That's why, as Berlusconi threatened to sack Tremonti, investors felt Italian default risks were more acute and demanded higher returns to hold Italy's sovereign debt.

Italy has a debt-to-GDP ratio of 119pc, among the largest in the eurozone. That's one reason Berlusconi's outburst sent Italian 10-year bond yields soaring to 5.27pc, up nearly half a percentage point. The premium Italy pays to borrow over and above Germany is now wider than at a euro-era high. With almost €1,000bn (£890bn) of sovereign liabilities maturing over the next five years, steeper yields will escalate Italy's refinance costs, acting as a millstone around the neck of the economy.
http://www.telegraph.co.uk/finance/comm ... -debt.html
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Despondent for Europe tonight, nothing to add...

[JR8]

Going down like dominoes...

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'Top European Union officials will meet in Brussels on Monday morning to discuss the growing eurozone debt crisis amid fears that Italy could be the next country to be affected.

...

"The [bail-out] fund can't cope with Spain, let alone Italy. And each country getting into trouble means that one less country is contributing," said one expert.

So far, EU officials have been treating the debt crisis as a liquidity issue that can be dealt with using bail-outs. However, if economies the size of Italy get caught up in it, then broader structural changes to the eurozone are likely to be required.'
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http://www.telegraph.co.uk/finance/fina ... -meet.html

[JR8]

Shame EUster isn't here to remind us all how brilliant the EU and the euro is, and how the only problem was the Greeks lying to gain entry.

Ah well, I'm sure he'll find time to come back and clarify things before the EU have to intervene in Italy lol....

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'Bond yields in Italy and Spain, the euro zone's third and fourth largest economies respectively, remained under pressure on Tuesday with Italian 10-year bond now above the 5.7pc level which bankers say will start putting heavy pressure on Italy's finances.

"The bears have it today. There's very little reason for the market to see any strength," Justin Urquhart Stewart, director at Seven Investment Management, said.

"A lot of people have been really shaken by this. They didn't expect the Italian thing to blow up quite so quickly."

Eurozone officials are hoping concrete decisions on Greece can be taken at another meeting later this month, but Germany's finance minister, Wolfgang Schaeuble, said there was time until September, a date others say is too far off given the market onslaught against Italy.
--------------------------------
http://www.telegraph.co.uk/finance/fina ... rkets.html

Schaeuble is in deep denial. Italy's fate will be decided well before September, not least because the markets see the EU is run by a flock of headless chickens. Still, the euro as it currently exists is finished, so I can understand his difficulties with perception and acceptance of reality.

[JR8]

From one of the few politicians I respect and admire. No, not simply 'agree with', but respect and admire...


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PARLIAMENT BACKS BAIL OUTS
By johnredwood | Published: July 12, 2011

...
Some of us want the UK government to use the influence it says it has at the IMF to halt the futile bail outs of Eurozone members. The debt markets show the markets do not believe that Greece can repay all its debts in full and on time.

Yesterday was a day when market worries spread beyond Greece, Ireland and Portugal to Italy. Those in charge of the Euro scheme need to get a grip. It is doing a great deal of financial and economic damage, and they no longer seem to be in control of their project. The IMF should decline to bail out rich countries that have shackled themselves to a currency scheme that was badly put together and needs a thorough re think.
http://www.johnredwoodsdiary.com/2011/0 ... bail-outs/
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My bolding.

[JR8]

Ireland reduced to Junk status, Italy on the precipice.
What the hell, it is written on the wall.

TTFN


Edit to add, news just in:
'Fitch downgrades Greece to CCC'

[JR8]

'Eurozone debt crisis could prove 'very costly' for the world, warns IMF
The International Monetary Fund (IMF) has urged eurozone leaders to take immediate action over the region's debt crisis, warning it could prove "very costly" for the world.


http://www.telegraph.co.uk/finance/fina ... s-IMF.html




Where is EUster? It's just getting intersting!

[BillyB]

Hearing whispers/rumours that sentiment is suggesting Italy is going to topple in around 6 months, Spain to follow shortly after and Ireland needing a 2nd bailout next year.

The only way this is gonna stop is when the Euro is scrapped.

And the U.S debt crisis is becoming a very big concern, although to the Fed it's not an issue apparently. 40 cents on the dollar is borrowed money - what a structural mess.

And will the BOJ intervene to weaken the Yen given the U.S dollar is dropping like a tarts knickers?

What a mess.........

[JR8]

Hearing whispers/rumours that sentiment is suggesting Italy is going to topple in around 6 months, Spain to follow shortly after and Ireland needing a 2nd bailout next year.

Top hole Bunter!
The feeling that I get from Greece bail-out #2 is the politicians think they have saved the world, but haven't. They have concocted a e100bn sticky plaster, and meanwhile have buggered off for the mandatory 2 months summer holidays before they will even start to explain how Greece#2 might actually work. Classic arrogance coupled with stupidity, that leaves uncertainty, that the market will brood over in the interim. In any case Greece #2 leaves many questions

- How do the EU square that bailing out countries is illegal under the Lisbon Treaty?
- Should Greece now have a AAA rating?
- Italy have to pay 6% odd in the markets, whilst itself being obliged to lend funds to PIG at 3.5%? Rationale?
- What incentive is there for Greece (or others) to sell off assets or run their economies in a sound manner, now that their rich neighbours propose open-endedly funding their errant ways?
- And so on.

I see Italy pulled a bond auction yesterday and the market reacted with relief. Lol! 'Something' of a warning sign of things to come!

The EU still have no plan#B for the euro-zone. They only seem capable of delaying it's implosion by repeatedly showering the problem with hundreds of billions of taxpayers money. What a completely F'in futile exercise.



The only way this is gonna stop is when the Euro is scrapped.

That would require that politicians admit they made mistakes with the creation of the euro. Therefore it will not happen, there will be some expensive half-cocked face saving fudge instead.


And the U.S debt crisis is becoming a very big concern, although to the Fed it's not an issue apparently. 40 cents on the dollar is borrowed money - what a structural mess.

And will the BOJ intervene to weaken the Yen given the U.S dollar is dropping like a tarts knickers?

What a mess.........

Obama is a laugh. He's spent all the money 2 years into his term, and now he's squealing for more. No wonder, without additional trillions with which to continue building his permanent client-vote-bank he might not get re-eclected. It's about priorities you know! lol.

[sundaymorningstaple]

Obama is a laugh. He's spent all the money 2 years into his term, and now he's squealing for more. No wonder, without additional trillions with which to continue building his permanent client-vote-bank he might not get re-eclected. It's about priorities you know! lol.

Now if I had written that, our friend in the UK would be all over me, even though it's the truth. I like it that all are screaming the Repuglicans are just being vindictive when you have just said what I've been saying for the past couple of weeks as well. We've given o'sama two blank cheques already that haven't done anything positive but a 'ell of lot of long term negative. And now, they just want him to show us what he's going to do before he can have it all. I think two tranches is the best policy as well. Course let Plavt get into the plonk later today and he'll be on it like gravy on a biscuit.

[BillyB]

To be fair to BO, he inherited a bit of a mess. But there is only so much blame culture you can use before people question your strategy. I think he is actually out of the mould of the last few presidents in that he did generally want change and to move away from the old school - you scratch my back and i'll scratch yours - approach. I thought he'd bring some success and alot of action and energy. I was wrong.

I guess he really isn't as shrewd and commercially focussed as everyone first thought.

To play devil's advocate - with 40 cents on the dollar borrowed how is anyone going to fundamentally change things in 3 years. You need at least two terms to get some traction. Maybe bring back the Clinton finance team - didn't they leave a relatively balanced book?!!

Are there any credible alternatives to take the leadership in the future? (That's a question, not a rhetoric)

[JR8]

Now if I had written that, our friend in the UK would be all over me, even though it's the truth. I like it that all are screaming the Repuglicans are just being vindictive when you have just said what I've been saying for the past couple of weeks as well. We've given o'sama two blank cheques already that haven't done anything positive but a 'ell of lot of long term negative. And now, they just want him to show us what he's going to do before he can have it all. I think two tranches is the best policy as well. Course let Plavt get into the plonk later today and he'll be on it like gravy on a biscuit.

Blair and Brown built just such a perma-vote-bank, by pouring untold billions on the poor. Coupled with an open-door immigration policy (to the extent they had no[/] idea how many immigrants were entering the UK each year. Shower the immigrants with free housing, money, healthcare etc., plus citizenship, and after some time your core vote is so loyal you can never get voted out what ever your policies.

Well, Labour very nearly achieved that position. Meanwhile so much focus was expended on that, they really achieved almost nothing substantive despite 13 years in office. Their crowning achievement was something they managed not to do: join the euro.