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Postby JR8 » Sun, 13 Nov 2011 4:08 pm

The EFSF (Europe rescue fund) was buying it's own Irish float this week due to lack of market demand.

aka the Europe Rescue Fund had to rescue itself.
aka the shipwrecked clinging to a wrecked hull begin drinking their own urine.


Inflation in much of the EU is higher than (even) the yield on 10yr sovereigns. Hence governments, in real terms, are being paid to borrow.

Be very afraid!


p.s. edit to add.
[Ironic joke]
'Europe's stock-markets have relief-rally on the above news'

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Postby BillyB » Mon, 14 Nov 2011 9:17 am

I have nothing positive to add about the EU.

There is no incentive for investors to buy EU sovereign debt. It's a liquidity risk, counterparty risk and a huge market risk (witness MF Global) as there are no guarantee's on the money being returned in the event of a default, nobody wants to buy it on the open market, it's subject to currency risk, and generally a list of points that should make the informed investor avoid it like the plague. There is no incentive to buy. Get the ECB to guarantee to buy back all the debt in the event of difficulties and things might change.

Also, the CDS's aren't worth the paper they are written on as they have so many clauses inserted as to what constitutes a 'default'. It's great for the writers of these products as they know its a nice cash flow and the governments will not be allowed to fail - the Greek haircut was not technically a default so the CDS's didn't pay out.
There has to be intervention to stop the EU collapsing and this plays into the hands of the CDS issuers.

The government are loading everything onto the citizens, and just focusing on the next stage of debt payments when they are due. They are all hoping for a miracle and it's like a giant ponzi scheme with a hot potato - keep on doing the minimum and passing the buck as half of them know they will be out of office when the shitstorm happens.

I can see Italy dropping in the next 6 months, which could trigger the meltdown. I think there is general acknowledgment that another huge financial crisis on the cards, it's more a question of when not if.

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Postby JR8 » Mon, 14 Nov 2011 10:03 am

It's all completely ****ing ****ed! You can pay to stick two trillion ****ing plasters on the thing but it is still completely and utterly ****ing ****ed and it changes ****ing nothing! :)

I used to live within the minute of the market and think it somehow a pure and all-seeing condenser of the truth.

[Now I'm older, and out of the trading pit, I am in awe at it's apparent madness]

Snort!

The market will catch up with reality in due course. So I'm just going to sit on my hands and wait for that day. No mad rush after all.

p.s. Bunter, what are you hearing about the 'accidental' S&P hit on France. Accident or actual that got slammed back by politics?

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Postby BillyB » Mon, 14 Nov 2011 7:48 pm

JR8 wrote:It's all completely ****ing ****ed! You can pay to stick two trillion ****ing plasters on the thing but it is still completely and utterly ****ing ****ed and it changes ****ing nothing! :)

I used to live within the minute of the market and think it somehow a pure and all-seeing condenser of the truth.

[Now I'm older, and out of the trading pit, I am in awe at it's apparent madness]

Snort!

The market will catch up with reality in due course. So I'm just going to sit on my hands and wait for that day. No mad rush after all.

p.s. Bunter, what are you hearing about the 'accidental' S&P hit on France. Accident or actual that got slammed back by politics?


The 'accidental' downgrade?! I'm not sure what to make of it really. May be politically motivated - a lot of sabotage / rumours happen in Paris, and isn't it the elections coming up soon?

Also, it makes everyone think the French are losing their creditworthiness - gives the French Government a reason to reduce helping in the EU sovereign crisis / bailouts.

On the other hand it could have been a simple email that leaked out, or it could have been intended to stir up panic in the EU to take the focus off Italy.

The rating agencies have already proven themselves to be moronic in the past and they generally cause more harm than good.....

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Postby JR8 » Mon, 14 Nov 2011 7:50 pm

BillyB wrote:I have nothing positive to add about the EU.

Nor do I. The sooner it is put down the sooner Europe can recover from this insanely stupid political project.

Meanwhile, no longer playing hide-the-bottle-of-claret I'm coming back for second bite on this... :)


There is no incentive for investors to buy EU sovereign debt. It's a liquidity risk, counterparty risk and a huge market risk (witness MF Global) as there are no guarantee's on the money being returned in the event of a default, nobody wants to buy it on the open market, it's subject to currency risk, and generally a list of points that should make the informed investor avoid it like the plague. There is no incentive to buy.

Yep, true. I also sense that you cannot believe the facts as they are being presented. I.e. if the EU is threatened with survival would you trust the ECB, or any EU institution, to tell the truth? There is a rumour that S&Ps 'accidental' downgrade of France was no accident, but was reversed via massive EU (i.e. France and Germany) pressure. If that is the case, you might conclude then you cannot trust anything...


Get the ECB to guarantee to buy back all the debt in the event of difficulties and things might change.

In the words of the Sex Pistols 'We already spent it (ha ha ha)'. Or Liam Byrne, outgoing Labour Treasury Minister in his hand-over memo to his successor, 'There's no money left, we spent it all'.

Fact is that the ECB is almost broke, it cannot afford open ended buying, and the market knows this. But but, hold on! We have to take a step back and remind ourselves that this bailing out by the ECB is
- contrary to it's own charter
- 'illegal' under the Lisbon Treaty
- illegal under the German Constitution.

Such 'inconveniences' seem to be simply brushed aside when they get in the way of the EU juggernaut. This is the democratic deficit that Europe currently faces, it is more akin to being run by the the Soviet Politburo.


Also, the CDS's aren't worth the paper they are written on as they have so many clauses inserted as to what constitutes a 'default'. It's great for the writers of these products as they know its a nice cash flow and the governments will not be allowed to fail - the Greek haircut was not technically a default so the CDS's didn't pay out.

Reminds me of the UK MPs expenses scandal, and how many of them claimed to have only made 'technical breaches' of the rules/law.

So from what you say (and I've read about CDSs not being triggered), we seem to have a lot of products not doing what people expected of them. For example sovereign bonds seem to have guaranteed built-in state rescue and therefore would seem to carry nil risk. Same for any EU bank considered 'too big to fail'. What is allowed to trigger or fail? It's moral hazard spreading like the plague, nothing is immune from it.



There has to be intervention to stop the EU collapsing and this plays into the hands of the CDS issuers.

Think Sterling, Soros, ERM. It's a one way play that the stupid EUrocrats set themselves up for.


The government are loading everything onto the citizens,

Er yes of course. The people are the only source of wealth creation. All this magic-money only comes from one place, the people. QE is deferred taxation, spending today what you will earn tomorrow.


and just focusing on the next stage of debt payments when they are due. They are all hoping for a miracle and it's like a giant ponzi scheme with a hot potato - keep on doing the minimum and passing the buck as half of them know they will be out of office when the shitstorm happens.

Yep. And Sarkozy's one and only priority right now is being re-elected in 6mos time. The direction and future of the EU is dominated by the immediate vanities of people like him. And that is precisely why the EU is so completely rogered!


I can see Italy dropping in the next 6 months, which could trigger the meltdown. I think there is general acknowledgment that another huge financial crisis on the cards, it's more a question of when not if.

They've got to rollover e280bn next year and absent the ECB buying it looks like it's going to be at 7+/-% and on double-margin. That is simply not sustainable, and the ECB cannot cover that either. That is why Spain is already the next duck in the row that the gun-sights are focusing on.

Coincidentally I understand that France have to roll-over e280bn of debt next year as well. I have no idea where all this money is going to come from. The Japanese have already been burnt by EU double-dealing and the Chinese won't touch it unless they can buy a 125 year lease of the EU's arse.



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Postby BillyB » Mon, 14 Nov 2011 8:11 pm

JR8 wrote:
BillyB wrote:I have nothing positive to add about the EU.

Nor do I. The sooner it is put down the sooner Europe can recover from this insanely stupid political project.

Meanwhile, no longer playing hide-the-bottle-of-claret I'm coming back for second bite on this... :)


There is no incentive for investors to buy EU sovereign debt. It's a liquidity risk, counterparty risk and a huge market risk (witness MF Global) as there are no guarantee's on the money being returned in the event of a default, nobody wants to buy it on the open market, it's subject to currency risk, and generally a list of points that should make the informed investor avoid it like the plague. There is no incentive to buy.

Yep, true. I also sense that you cannot believe the facts as they are being presented. I.e. if the EU is threatened with survival would you trust the ECB, or any EU institution, to tell the truth? There is a rumour that S&Ps 'accidental' downgrade of France was no accident, but was reversed via massive EU (i.e. France and Germany) pressure. If that is the case, you might conclude then you cannot trust anything...


Get the ECB to guarantee to buy back all the debt in the event of difficulties and things might change.

In the words of the Sex Pistols 'We already spent it (ha ha ha)'. Or Liam Byrne, outgoing Labour Treasury Minister in his hand-over memo to his successor, 'There's no money left, we spent it all'.

Fact is that the ECB is almost broke, it cannot afford open ended buying, and the market knows this. But but, hold on! We have to take a step back and remind ourselves that this bailing out by the ECB is
- contrary to it's own charter
- 'illegal' under the Lisbon Treaty
- illegal under the German Constitution.

Such 'inconveniences' seem to be simply brushed aside when they get in the way of the EU juggernaut. This is the democratic deficit that Europe currently faces, it is more akin to being run by the the Soviet Politburo.


Also, the CDS's aren't worth the paper they are written on as they have so many clauses inserted as to what constitutes a 'default'. It's great for the writers of these products as they know its a nice cash flow and the governments will not be allowed to fail - the Greek haircut was not technically a default so the CDS's didn't pay out.

Reminds me of the UK MPs expenses scandal, and how many of them claimed to have only made 'technical breaches' of the rules/law.

So from what you say (and I've read about CDSs not being triggered), we seem to have a lot of products not doing what people expected of them. For example sovereign bonds seem to have guaranteed built-in state rescue and therefore would seem to carry nil risk. Same for any EU bank considered 'too big to fail'. What is allowed to trigger or fail? It's moral hazard spreading like the plague, nothing is immune from it.



There has to be intervention to stop the EU collapsing and this plays into the hands of the CDS issuers.

Think Sterling, Soros, ERM. It's a one way play that the stupid EUrocrats set themselves up for.


The government are loading everything onto the citizens,

Er yes of course. The people are the only source of wealth creation. All this magic-money only comes from one place, the people. QE is deferred taxation, spending today what you will earn tomorrow.


and just focusing on the next stage of debt payments when they are due. They are all hoping for a miracle and it's like a giant ponzi scheme with a hot potato - keep on doing the minimum and passing the buck as half of them know they will be out of office when the shitstorm happens.

Yep. And Sarkozy's one and only priority right now is being re-elected in 6mos time. The direction and future of the EU is dominated by the immediate vanities of people like him. And that is precisely why the EU is so completely rogered!


I can see Italy dropping in the next 6 months, which could trigger the meltdown. I think there is general acknowledgment that another huge financial crisis on the cards, it's more a question of when not if.

They've got to rollover e280bn next year and absent the ECB buying it looks like it's going to be at 7+/-% and on double-margin. That is simply not sustainable, and the ECB cannot cover that either. That is why Spain is already the next duck in the row that the gun-sights are focusing on.

Coincidentally I understand that France have to roll-over e280bn of debt next year as well. I have no idea where all this money is going to come from. The Japanese have already been burnt by EU double-dealing and the Chinese won't touch it unless they can buy a 125 year lease of the EU's arse.




You've made many good points, but the one I highlighted in bold is the most interesting on my part. You've got traders who took on large positions in EU bonds (Irish) and shit themselves and tried to unwind at 30/40 cents on the dollar when it went tit's up. The governments wouldn't buy them back. But then in steps the ECB/IMF and protects all institutional investors. So the speculators get par value for their junk bonds and the taxpayers bail them out. What a complete and utter f*ck-up!!

On the ECb - have a read of Soros's thoughts. SOme of which I agree with.

http://www.wallstreetandtech.com/regula ... tech_daily

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Postby JR8 » Tue, 15 Nov 2011 9:48 pm

Beware socialist billionaires bearing advice. 8-)

It troubles me that this 'trick' is just still another sticking plaster, and a freakin expensive one too. It does not deal with the fact that Greeks et al do not have the temperament, work mentality, of the Germans, and tying them together in a straitjacket is surely some kind of insanity.


p.s. I hear French and Belgium CDS are peaking.... Jeez, does anyone still think these instruments ever pay out ... lol

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Postby JR8 » Wed, 16 Nov 2011 8:28 am

-------------
But the bond markets were rapidly closing off capital market funding as an option for some of Europe's biggest economies.

The yield on Italian 10-year bonds soared above the 7pc threshold considered by economists to be unsustainable. They were hauled back in afternoon trading - possibly by ECB intervention - but soon rose again to close at 7.27pc.

Spain was also punished with the yield on 10-year bonds being pushed up 175 basis points to 6.6pc.
http://www.telegraph.co.uk/finance/fina ... ozone.html
-------------------


Hahahahaha!!!! It amuses me how we now take this daily insanity as the new everyday normal.



Edit to add:

Final line from same article...
'In London the FTSE 100 was almost flat down 0.03pc.'

Hahahahaha!!! 'World ends: FTSE down 0.2%' .... lol!!!!!!!!!!!

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Postby JR8 » Thu, 17 Nov 2011 7:06 am

I'm coming to the conclusion that London is acting as a non-euro safe-haven market, given the CHF is pegged and there aren't many 'AAA reserve currency (cough)' alternatives. In which case I wonder if what ever happens in the EU London will still coast or flatline... at least in the near-term.


Meanwhile in late news Sarkozy comes out fighting as French OATS hit record 195bps over Bunds...
Image

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Postby x9200 » Sun, 20 Nov 2011 7:44 pm

Fits this thread.

After: http://www.telegraph.co.uk/news/worldne ... ation.html
EU bans claim that water can prevent dehydration
EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

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Postby richie303 » Sun, 20 Nov 2011 8:07 pm

x9200 wrote:Fits this thread.

After: http://www.telegraph.co.uk/news/worldne ... ation.html
EU bans claim that water can prevent dehydration
EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.


:o :o :o :o :o :o :o :o :o :o :o

http://www.thedailymash.co.uk/news/business/osborne-helps-by-saying-france-is-about-to-explode-201111144539/

This fits too ;) :P :twisted:
Richie - East Coast Superbabe...

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Postby BillyB » Mon, 21 Nov 2011 2:40 pm

richie303 wrote:
x9200 wrote:Fits this thread.

After: http://www.telegraph.co.uk/news/worldne ... ation.html
EU bans claim that water can prevent dehydration
EU officials concluded that, following a three-year investigation, there was no evidence to prove the previously undisputed fact.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.


:o :o :o :o :o :o :o :o :o :o :o

http://www.thedailymash.co.uk/news/business/osborne-helps-by-saying-france-is-about-to-explode-201111144539/

This fits too ;) :P :twisted:


George Osbourne is banned on here......

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Postby richie303 » Tue, 22 Nov 2011 10:36 pm

Don't blame you! I'd have banned him from the Cabinet!
Richie - East Coast Superbabe...

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Postby JR8 » Tue, 22 Nov 2011 10:38 pm

Has Spain blowna uppa (as they say in Spain) yet?

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Postby JR8 » Wed, 23 Nov 2011 7:33 pm

I reckon the below story is going to have legs...

--------------------------------------------------------------------------------------
'11.00 [London]
Reaction is coming through on that German bond auction - Neil Hume of the Financial Times says its a disaster. Via Twitter:

@humenm.
I cannot recall a worse auction, only EUR 3.889 Bln of bids in total for a EUR 6.0 Bln auction, and this is the new 10yr benchmark, and that is a cover of 0.65x.

If Germany can only manage this sort of participation, what hope for the rest. Yields are at completely the wrong level.
http://www.telegraph.co.uk/finance/debt ... -live.html


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