Away From The Headlines…
Away from the headlines, I was wondering what is happening with the Greek “private sector involvement”. It seems that they will receive enough money to pay off their 7 billion EUR of debt coming due this year. Greece has 22 billion coming due in the first quarter next year. Why would banks negotiate in good faith […]
(BN) *DRAGHI SAYS EBA REPORT WILL BE REASSURING
EBA? European Banking Authority. Shocker that another 3 letter entity would produce a reassuring report. I have to admit, I had to google what an EBA is. In the meantime, Draghi also said that the plan of lending money to the IMF so the IMF can lend the money bank may not fit into the […]
(BN) *DRAGHI SAYS TREATY SAYS NO MONETARY FINANCING
Not sure what exactly no “monetary” financing means, but I suspect it isn’t what the market was hoping for. Maybe they can continue to pretend to “sterilize” but this seems like he is stepping back. Did Germany spend an entire week saying the ECB was independent so they wouldn’t take all the blame for this? […]
(BN) *MERKEL SAYS FINANCIAL INDUSTRY MUST ‘SERVE THE PEOPLE’
So many headlines, so little ability to figure out what any of it means. The financial industry must “serve the people” yet, they just got unlimited money for 3 years on whatever collateral they can scrape up? How the ECB can promise that without printing is a big question. On the other hand, why back […]
How Real Is The Rally In Corporate Credit?
IG17, the CDX index has been very strong, though it has stabilized at these levels for the past couple of days. The “basis” has become very rich. The index is trading more than 7 bps tighter than the fair value. This is a clear sign that the market has been squeezed and that hedges are coming off but the rally […]
Act II Begins
The intermission is over and now we get to the heart of the matter. ECB We will get some actual information this morning. The ECB will cut rates, 25 bps at a minimum and possibly 50 bps. That isn’t news and is priced in. Any pop on a 25 bp cut is likely to be […]
IMF
I do not believe that the IMF can create a new plan above its existing unallocated money without new commitments from its members. The EU is effectively out. The US will struggle to approve anything. China, Russia, and Brazil are not necessarily in position to increase their commitments as they all have domestic problems. Japan […]
(BN) Merkel, Sarkozy Propose Tighter Budget Rules in EU
“Reaffirm their inflexible determination to honor fully their own individual sovereign signature” Something seems to have been lost in translation, or the market is about to be disappointed. +——————————————————————————+ Merkel, Sarkozy Propose Tighter Budget Rules in EU Overhaul 2011-12-07 14:18:39.873 GMT By Gregory Viscusi Dec. 7 (Bloomberg) — French President Nicolas Sarkozy and German Chancellor […]
(BN) ECB Said to Consider Extra Measures to Stimulate Bank Lending
Disappointing. Yes we will get a 50 bp rate cut tomorrow, but this is NOT what the market was looking for. Also, how does this really help lending to anything other than sovereigns and other banks (if it even does that). Remember way back when we all used to complain about how Japan was creating […]
Europe Doesn’t Get It
I still think the most likely scenario is that some agreement to agree is made at the summit, which is then followed up by increased printing from the ECB, coupled with new Fed policies and fresh IMF money. Although that still seems the most likely, I am getting concerned that Europe is once again missing […]