sovereign debt

Picture du Jour: U.S. at risk of losing its AAA status?

While the debate about the U.S. debt ceiling is taking place, Société Générale is of the opinion that a downgrading of the country’s sovereign debt is just a matter of when and how fast interest rates on its borrowings rise.

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What happens when SNB is stopped out?

We have brought up the Swiss National bankers and what they have been doing for last several months by buying Euros in their attempt to weaken the Swiss Franc but the market keep pushing the Franc higher and Euro lower. A while back SNB kneed down to the market in a statement by the central bank in which the bank stated they wouldn’t buy Euros anymore. Well, SNB banker did pause for a while and guess what? Swiss Franc actually weakened instead of gaining strength versus the Euro. Perhaps it was that very market move which forced the SNB bankers to get to the kill again. What amazes us is that Swiss take pride in banking and thus are known as the smartest of bankers, but what have they been doing since past year? Are they not worried about their jobs? For we have stated several times in the past we’d hate to be at the helms of SNB when it had such a large exposure of Euros. A year earlier the pair stood at 1.48 whereas today and as we write it stands at 1.249s. The interventions efforts which we can imagine would have been discussed and deliberated upon many many times in closed rooms shall prove to the stupidest decision the bank has ever taken. This reminds

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Bloomberg Sues Trichet & European Central Bank

Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis. Video — Dec. 22 Bloomberg — Matthew Winkler, editor-in-chief of Bloomberg News, discusses the news agency’s lawsuit against the European Central Bank. —

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Gold and Silver Prices to Spike Next Week

Gold and Silver Prices to Spike Next Week

Gold and silver prices have remained volatile in both directions since October. But indications from the COMEX show suggest we may see a spike in these precious metals prices next week… As prices moved higher over the past two weeks, strong bouts of profit taking have hit the gold and silver markets in each instance, stalling the next attempt to hit another new high. World Gold and Silver Demand World investment demand for gold has increased 250% in the past ten years. Investment demand for silver has skyrocketed 522% since 2007. Sales of official gold coins (like the American Gold Eagle) have increased 618% since 2007. World governments are hoarding silver; official sales have plummeted 83% in the past three years. Gold demand for ETFs has increased 20,470% since 2002. Above-ground silver supplies dropped 86% last year. Industrial demand for silver has increased over the past decade, despite a 236% increase in prices. On the downside action over the past two weeks, strong buying support has come in as precious metals prices looked like they were going to sell off— thus our current holding pattern in gold and silver prices. This will change to the upside within the next two weeks as major buying of physical metal will need to take place in order to meet contractual obligations on the COMEX before December 31, 2010. Contracts for gold and silver December futures that demand physical metal must be met by then. But there appears to be a significant shortfall in the actual physical metal required to meet these demands — especially in silver… If these contractual obligations are not met by the 12/31/10 deadline, then we could see a default scenario, which would drive the metals prices even higher and cause great instability for other markets as well. This potential default is due to the fact that JP Morgan Chase, the largest fractional stock holder of the Federal Reserve, has been wildly shorting silver and is now caught between a rock and a hard place. Word on the street is that JP Morgan Chase has opted to go massively long copper in an attempt to hedge their losses in silver, which could be enormous. This is…

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The Best Signal of All: Railroad Stocks

It’s increasingly likely that stock prices will keep their positive bias going into 2011. That is, if there isn’t a major shock to the system like a new war or sovereign debt default. At the end of the day, the earnings picture, along with accommodative monetary policy, is supportive of rising stock prices. Goldman Sachs

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Will the Euro Fall to $1.20?

Filed in Debt, euro, o, South African Gold, sov, sovere, sovereign debt by on December 1, 2010 0 Comments
Will the Euro Fall to $1.20?

Filed under: Forecasts , Market Matters , Currency The euro is a single currency holding 16 member nations together. Before the Greek crisis, countries’ sovereign debt was viewed fairly uniformly from country to country. In other words, you could hold a Greek bond or a German bond with relative security in your investment. Enter the Greek crisis, the Irish crisis and possibly the Portuguese and Spanish crises. Now the value of each country’s bonds fluctuates widely. Investors have lost faith, not only in individual countries’ bonds, but also in the euro, the currency that is holding the group together. Continue reading Will the Euro Fall to $1.20? Will the Euro Fall to $1.20? originally appeared on BloggingStocks on Wed, 01 Dec 2010 14:00:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Irish Relief Fleeting as `Day of Reckoning’ Nears

Borrowing costs for Europe’s most indebted nations are at record highs as Ireland’s capitulation in accepting a bailout of its banking industry stokes concern that other countries also will have to seek aid. “It’s no longer taboo to speak about a restructuring,” said Johannes Jooste, a portfolio strategist at Bank of America Corp.’s Merrill Lynch Global Wealth Management (*at least their in good hands !) Irish Relief Fleeting as `Day of Reckoning’ Nears Borrowing costs for Europe’s most indebted nations are at record highs as Ireland’s capitulation in accepting a bailout of its banking industry stokes concern that other countries also will have to seek aid. The average yield for 10-year debt from Greece, Ireland, Portugal, Spain and Italy reached 7.57 percent today, a euro- era record. The average premium investors demand to hold those securities instead of German bunds widened to as much as 492 basis points, the highest level of 2010. The average cost of insuring against default by the five nations using credit- default swaps reached a record 517 basis points on Nov. 23. “It’s no longer taboo to speak about a restructuring,” said Johannes Jooste, a portfolio strategist at Bank of America Corp.’s Merrill Lynch Global Wealth Management in London, which oversees about $1.4 trillion for clients. “The fact that bond yields continue to rise and put pressure on countries that have to fund from the market makes investors less and less confident, and it’s bringing forward the day of reckoning.” The Nov. 22 relief rally after Irish Prime Minister Brian Cowen conceded that the nation needed financial support proved transient. Irish 10-year bond yields fell 4 basis points, before jumping 104 basis points as of 3:13 p.m. in London today, exceeding 9 percent for the first time since 1995. The euro’s respite was more fleeting; the bailout inspired a 0.8 percent gain for the currency before it slumped to …

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Gold Prices Today Slightly Down, Await China, Ireland

While it seems China’s decision has finally been unveiled on what they’re going to do to combat inflation, Irelands is still waiting in relationship to their sovereign debt crisis, and gold prices today are under slight downward pressure until that plays itself out.China has taken the initiative to increase the amount of reserves banks mus hold by another 50 basis points, something that is less

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Citigroup (NYSE:C) Sees Greek, Irish, Portuguese Bonds Continuing to Fall

As risks increase for the sovereign debt of Greece, Ireland and Portugal, Citigroup (NYSE:C) says they see bonds in the countries continuing to fall, as the crisis grows.Citigroup said, “Ireland, Portugal and Greece have underperformed significantly, but we do not think by anywhere near far enough yet. There’s a long way further to go if the situation deteriorates.”The yield on Irish bonds rose

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Traders and Investors Selling the Euro

Traders and Investors Selling the Euro

Filed under: International Markets , Currency The eurozone sovereign debt crisis has bubbled to the surface again. This time Ireland is in the cross hairs. Ireland may need aid, primarily to bail out its banks. Ireland says it has enough cash to carry it through next summer, but the key concern is keeping Irish banks afloat during this crisis. So far, Ireland hasn’t requested financial aid from the European Union. This uncertainty has set off a selling spree in the euro. About two weeks ago the euro was trading at $1.42. Since the Irish crisis began the euro dropped to $1.35. Continue reading Traders and Investors Selling the Euro Traders and Investors Selling the Euro originally appeared on BloggingStocks on Tue, 16 Nov 2010 11:00:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Greek Deputy PM: "Debts exist to be restructured"

Call it a Freudian slip, or perhapsit was one of the first honest statements by a European politician regarding the sovereign debt crisis.According to ekathimerini.com, Greece’s Deputy Prime Minister Theodoros Pangalos spilled what could be…

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Commodites are Poised to Head Higher

Commodites are Poised to Head Higher

Having lived through the 70s, it’s hard to look back on those days without having a good chuckle… What with disco, bell bottoms, and all of that hair, the “me decade” seems kind of comical compared to what followed it. But one thing that definitely wasn’t groovy back then was the misery index. Talk about a bummer. Created by economist Arthur Okun, the misery index was calculated by adding the unemployment rate to the inflation rate. Naturally, the higher the number turned out to be, the greater the level of misery. A 70s rerun But as it turned out, the misery index wasn’t just some tool used by economists to put a hard number on the suffering; in the hands of James Earl Carter, it actually became a ticket to the White House. During the presidential campaign of 1976, Candidate Carter made frequent references to the misery index, stating that no man responsible for a misery index that high had a right to even ask to be president. Of course, Carter was referring to President Gerald Ford, who presided over an economy with a score of almost 14% during the campaign. (In May of that year, the inflation rate was 6.2%, while unemployment rate stood at 7.40%.) The rest, as they say, is history— and as history provided the crack, Carter waltzed right through it. But by the election of 1980, Carter’s own words turned on him as he lost in a landslide to Ronald Reagan. Under Carter, the misery index had reached an all-time high of 21.98%, giving a whole new meaning to the word malaise . Some 34 years later, history might be on the verge of repeating itself again because of higher commodity prices. Because with the unemployment rate stuck seemingly in the 9%-10% range, and the Fed working overtime to create inflation, the misery index is on the cusp of a comeback in the familiar form of stagflation. Stagflation, of course, is the worst-case scenario. In short, it’s a period during which the economy stumbles and inflation soars. And while the deflation camp continues to argue that soft aggregate demand in developed economies will keep inflation at bay, I’m not sure they can fight against the tide of devalued currencies and the growing commodities demand spurred by emerging markets… On the verge of decoupling? While the developed economies are still spinning their wheels, countries like China, India, and Brazil are stepping on the gas. Unhampered by exploding asset bubbles and massive sovereign debt problems, these emerging markets are flush with cash and ready to lead the world economy. In fact while the U.S economy is only projected to grow by a paltry 1.9% in 2011, GDP growth in …

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