90 seconds at 9 am with BNZ: Irish, Spanish bond yields up again; ECB says can lift bailout fund; Euro break-up 'inconceivable'; NZ$ stable

 

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....

Dont think ze Germans wantr to increase the bail out fund......

http://online.wsj.com/article/SB10001424052748704638304575636580416827208.html

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.