Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that Irish and Spanish bond yields rose again on further nervousness about whether the Irish bailout will stop a contagion that ultimately destroys the Euro.
The London Clearing House increased its margins for trading Irish bonds for the third time and the European Central Bank President Axel Weber said the current European bailout fund of 750 billion euros could be increased if necessary.
Most believe the fund could cope with a Portugese bailout, but would struggle to cope with a Spanish bailout.
Also, news emerged that Spanish banks could triple the number of foreclosure or mortgagee sales next year after new accounting rules force them to account for falling house prices in Spain.
Also, the head of the European Bailout Fund has said the breakup of the Eurozone would be "inconceivable".
The euro fell again, but the New Zealand dollar has been remarkably stable vs the Euro this week because it has fallen against the US dollar in the wake of Standard and Poor's decision to put New Zealand's credit rating on negative outlook.
No chart with that title exists.
7 Comments
On Bondholders, out of the Telegraph, again
robertsonjames
11 hours ago
Two bits of translation into plain English are required here, as ever when EU leaders talk.
First, when Merkel's people speak about "bondholders" taking a "haircut" the language is deliberately vague and designed to leave space for the listener to conjure up their own image of what it entails, generally the appealing one of top-hatted, monocled, champagne-quaffing toffs in the City and bonus-trousering spivs on Wall Street losing some of their ill-gotten "speculative" gains. In reality this is not at all what is meant.
We are pretty much all "bondholders". Anyone with a pension fund, bank savings, an insurance policy, an endowment policy or any other investment asset in the hands of a financial institution is a creditor holding sovereign debt. Indeed, it's a formal requirement for many such fund managers that they buy a certain proportion of this sort of debt on our behalf because it is classically rated as very safe. So when the Germans talk about bondholders taking haircuts, what they mean is that you and I are going to have to accept a reduction in the pension, endowment, or whatever we've been paying for. Sounds somewhat less attractive put that way, no?
Second, the "haircut" is larceny pure and simple. These are not immoral "speculators" who deserve a kicking but rather, as I've said, ordinary savers and investors who are being told that, EU states having borrowed their money and spent it, will not be getting parts of it back. Dress that up however you want and it's still theft by politicians and their voters/clients: in fact, it's classic Brownism, stealing money from the future to buy votes today.
What the Germans again fail to add is that the consequence of an EU state defaulting is that their credit rating will rightly plummet and investors and fund managers will stop putting money into Euro-denominated debt instruments that have suddenly become high risk. So a default has results in terms of Euro members' future ability to borrow affordably, in turn leading to savage cuts in European state spending further down the line. Either way, defaults won't stop massive reductions in government spending being needed, as some Guardianistas like to fantasise: it merely pushes the inevitable cuts beyond the next elections....
Either way, defaults won't stop massive reductions in government spending being needed, as some Guardianistas like to fantasise: it merely pushes the inevitable cuts beyond the next elections....
JK??
Dont think ze Germans wantr to increase the bail out fund......
http://online.wsj.com/article/SB10001424052748704638304575636580416827208.html
Heres a nice example of boom and bust in the Irish property market; http://www.guardian.co.uk/business/2010/nov/25/donegal-property-development-auction-bid-5000
Euro breakup inconceivable?
Bit of truth telling here.
"Who the hell do you think you are?"
http://www.youtube.com/watch?v=Fyq7WRr_GPg&feature=player_embedded
The Euro . . . propping up the USD since 1971.
"Nearly every week recently we get more Premonitory Signs that The Big One – Another International Financial Crisis of Magnitude of the 2008 Crisis, or even Greater -- is Coming Soon to all of us around the world." Richerd Russell.
http://www.marketoracle.co.uk/Article24553.html
Here comes Mr Market and you better watch out cos he is seriously cheesed off.
The Big one? its already happened but it takes a while to notice it..General strike in Portugal..rioting in London and Ireland.The problem this time round is that hardly anyone has a clue how to grow a lettuce.Soon all the overseas kiwis will be coming home.lets hope they bring their hard earned with them.
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