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    The Euro...


    Thought it might be helpful to have a thread tracking what's going on with the Euro/Eurozone over the next few months, as things are heating up. Let's keep it on topic - I'll refrain from the promotion of anarcho-syndicalism if everyone else promises to refrain from the usual pro/anti/not actually anti but a bit pissed off arguments about Europe.


    This as a starter for 10...

    http://www.guardian.co.uk/business/2.../moodys-cuts-s pain-credit-rating-downgrade

    <div id="main-article-info">



    <h1>Moody's cuts Spain's credit rating</h1>

    Downgrade to third rank for Spain heightens ongoing European Union debt crisis


    </div>
    <div id="article--blocks">


    Moody's has cut Spain's credit rating by another notch, escalating the ongoing debt crisis in the eurozone.

    Spain's
    rating was downgraded to Aa2, Moody's third highest rating, as the
    agency warned that the country had under-estimated the cost of rescuing its banking sector.
    The move came as borrowing costs continued to rise for weaker members
    of the eurozone, raising fears that further rescue packages will be
    needed.

    "Although Moody's acknowledges that the government's recently announced acceleration of efforts to restructure the cajas
    [Spain's savings banks] is likely to strengthen the country's banking
    landscape, the rating agency believes there is a meaningful risk that
    the eventual cost of the recapitalisation," said Moody's. It now
    believes the rescue package will cost between €40bn and €50bn (£34.4bn
    and £42.8bn), more than twice its own earlier estimate of €17bn.

    "The heat has been turned up on the bubbling tensions in the Eurozone," said Jane Foley, senior currency strategist at Rabobank.

    The
    downgrade knocked around half a cent off the euro, which fell to a
    one-week low of $1.3804. Stock markets also suffered losses, with the
    FTSE 100 losing 63 points to 5873.

    Moody's had threatened three months ago that it might downgrade Spain,
    but the decision was swiftly criticised by Madrid. The Spanish
    government pointed out that it is scheduled to release new data on its
    banking recapitalisation plans on Thursday evening.

    Under this plan, Spain is expected to partially nationalise the cajas, force them to become conventional banks and then float them on the stock market.

    Spanish
    treasury director Soledad Núñez also accused Moody's of overlooking its
    efforts to cut its deficit, and its reform of public sector pensions.

    Foley warned that Europe's current rescue fund would be almost wiped out if Spain and Portugal required a bailout.

    "It
    remains essential that the European Financial Stability Facility is
    bolstered to reassure markets that there is enough ammunition to protect
    EMU against all eventualities," Foley said.

    The cost of insuring
    government debt issues by Spain, Greece and Portugal all widened
    following Moody's move, according to Markit.

    "The rating agencies
    have often been on the sidelines during the sovereign debt crisis. But
    this week they have shown that they can still move markets. Greece
    received a multi-notch downgrade from Moody's on Monday and now Spain
    has been cut one notch to Aa2 by the same agency," said Gavan Nolan,
    Markit's director of credit research.

    "The sovereign market is
    already racked by uncer
    "We will not walk in fear, one of another. We will not be driven into an age of unreason if we dig deep into our history and remember we are not descended from fearful men" Edward R Murrow

    "Little by little, we have been brought into the present condition in which we are able neither to tolerate the evils from which we suffer, nor the remedies we need to cure them." - Livy


    "I think that progress has been made by two flames that have always been burning in the human heart. The flame of anger against injustice and the flame of hope that you can build a better world" - Tony Benn

    #2
    Originally posted by Balla Boy
    Let's keep it on topic - I'll refrain from the promotion of anarcho-syndicalism if everyone else promises to refrain from
    the usual pro/anti/not actually anti but a bit pissed off arguments about Europe.
    Watch Balla off tinkin' he's Noam Chomsky boyz
    "Newmarket hit Clonlara hard in the first ten minutes but doing so to a team like Clonlara is like hitting a bear. Better off to play away and not to antagonise the beast."

    Comment


      #3


      Only 50 billion? Fecking amateurs!!!


      Portugal sold 1 billion yesterday the interest rate was close to 6%


      Things could get very hairy for the euro in the next couple of months.
      Excellence is hard to keep quite - Sherrie Coale

      Comment


        #4
        Originally posted by McCloud


        Only 50 billion? Fecking amateurs!!!


        Portugal sold 1 billion yesterday the interest rate was close to 6%


        Things could get very hairy for the euro in the next couple of months.


        Maybe its an Irish €50 billion which will really turn out to be €180 billion plus.


        For those that would have an insight into such things what are the upsides to staying in the Euro?
        I am one of the 5 clowns woo hoo

        Comment


          #5
          I can hear Eamo stuffing more German Euro notes under his mattress.

          Comment


            #6
            I hear Brian Cowen is going to Madrid on his retirement from
            politics holiday.
            "Isn't it enough to see that a garden is beautiful without having to believe that there are fairies at the bottom of it too ?" - Douglas Adams

            Comment


              #7


              Certainly don't have enough knowledge on these things, but would a Euro crisis actually be of benefit to Ireland.


              A real Euro crisis that is (not just something that can be limited to the PIIGS)
              Con Artist

              Comment


                #8
                From a Technical perspective: I wont bore you with the mathematics but:

                i think the possible bailouts maybe in the price.

                Ive studied the EUR-GBP/USD/CHF charts and the euro looks as though it will rise against the first two medium term.

                the euro is in a downward trading range against CHF and needs a few strong months to confirm the low of approx 1.24 in January was a significant bottom-In fact contrary to the GBP and USD Charts the euro looks like a short against the CHF.

                All very strange

                If the lessons of history teach us anything it is that nobody learns the lessons that history teaches us.

                Comment


                  #9
                  Originally posted by munsterforever
                  From a Technical perspective: I
                  wont bore you with the mathematics but:i think the possible
                  bailouts maybe in the price.Ive studied the EUR-
                  GBP/USD/CHF charts and the euro looks as though it will
                  rise against the first two medium term.the euro is in a
                  downward trading range against CHF and needs a few
                  strong months to confirm the low of approx 1.24 in January
                  was a significant bottom-In fact contrary to the GBP and
                  USD Charts the euro looks like a short against the CHF.All
                  very strange
                  Silly question coming up, but why is it so strange? The
                  seeming disconnect between EUR/USD and EUR/CHF rates?

                  As an aside, my far from expert opinion sees the USD
                  seriously faltering as a haven currency.
                  Biffo ate my future.

                  Comment


                    #10


                    Originally posted by munsterforever
                    From a Technical perspective: I wont bore you with the mathematics but:

                    i think the possible bailouts maybe in the price.

                    Ive studied the EUR-GBP/USD/CHF charts and the euro looks as though it will rise against the first two medium term.

                    the euro is in a downward trading range against CHF and needs a few strong months to confirm the low of approx 1.24 in January was a significant bottom-In fact contrary to the GBP and USD Charts the euro looks like a short against the CHF.

                    All very strange

                    Is this the Rhythm Method by any chance[img]smileys/wink.gif[/img]

                    Comment


                      #11

                      Originally posted by paki
                      Originally posted by munsterforever
                      From a Technical perspective: I

                      wont bore you with the mathematics but:i think the possible

                      bailouts maybe in the price.Ive studied the EUR-

                      GBP/USD/CHF charts and the euro looks as though it will

                      rise against the first two medium term.the euro is in a

                      downward trading range against CHF and needs a few

                      strong months to confirm the low of approx 1.24 in January

                      was a significant bottom-In fact contrary to the GBP and

                      USD Charts the euro looks like a short against the CHF.All

                      very strange


                      Silly question coming up, but why is it so strange? The

                      seeming disconnect between EUR/USD and EUR/CHF rates?



                      As an aside, my far from expert opinion sees the USD

                      seriously faltering as a haven currency.
                      the CHF chart is very weird-the Euro has been in an over 3 year bear market, lower tops and lower bottoms all the way down, losing over 25% of its value in the process-a total and utter one way bet for 3 years and appears to be that still. In my experience when things get that easy its time for a reversal and there's no technical sign of that happening at all....having said that-checkout the USD/AUD chart the dollar being hammered for 8 years!! i will hazard a guess that at least a retracement is due
                      If the lessons of history teach us anything it is that nobody learns the lessons that history teaches us.

                      Comment


                        #12
                        Portugal looks like it might need a bailout. We might default. Interesting times.
                        <a href="http://www.zerohedge.com/article/citi-recommends-buying-irish-cds-advance-nightmare-kildare-street" target="_blank">
                        http://www.zerohedge.com/article/cit...ds-buying-iris h-cds-advance-nightmare-kildare-street </a>

                        Earlier today, JPMorgan made waves by claiming, some would say rather uncouthly, that Portugal's government is about to keel over and die (even if it is undisputed- after all, on Wall Street no one can hear you speak the truth). Never one to be left wanting, here comes Citi with some charts of "parabolic" moves in the Irish 2 Year bond, and some even scarier claims. As expected any research report that starts with the words: "Oh dear...The picture on Irish interest rate markets is taking a very grim turn" - well, it is clear where it is going from there. In summary, Citi now believes that Ireland is essentially done for, or as Tom Fitzpatrick ever so more diplomatically puts it "things are about to get ugly", and recommends going long CDS since the entire short end of the curve has gone parabolic, now that Europe seems set to watch the island country explode, 2s10s has inverted in the past few days, and overall the Emerald Isle is now a dead man walking in the dumbest game of chicken since the creation of the euro. Too bad neither side is willing to back out, which will ultimately end with the eventual destruction of the eurozone and the euro.

                        The backdrop per Citi:

                        Irish bank stress tests are due at the end of this month. The Government is thought to likely have a good idea of the results heading in to the EU summit later this week

                        Irish bank shares remain under pressure

                        Increasing talk in press about possible debt “haircuts”

                        Total opposition in Ireland to compromise on Corporate tax rate.

                        Total opposition in Europe to compromise on Corporate tax rate

                        ECB set to raise rates (Repeat of policy mistake of 2008? They raised rates on July 3rd 2008 and EURUSD began a rapid descent 2 weeks later)

                        80% of Irish mortgages are variable/ECB trackers NAMA has begun to sell assets

                        This has all the hallmarks of something that might start to get ugly. It is “obvious to a blind man” that Ireland does not have the ability to meet the present requirements (Almost certainly neither on the level of interest rates or level of debt).



                        In addition Europe does have a track record of “snatching defeat from the jaws of victory” How ironic if having come to an agreement on the ESM (European Stability Mechanism) that taking too hard a line with Ireland, when the cost of supporting them is so small in the overall scheme of things, together with a pre-emptive policy decision by the ECB could derail all that work in the coming weeks.



                        Given this back drop and given that the set up on EURUSD is similar to that seen in July 2008 (U.S. credit crisis) and again in November 2010- EURO sovereign crisis (16 months later and 16 months prior to today) as per our note of today we have to admit that we are getting increasingly nervous about this back drop ......




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                        Comment


                          #13
                          "...and overall the Emerald Isle is now a dead man walking in the dumbest
                          game of chicken since the creation of the euro. Too bad neither side is
                          willing to back out, which will ultimately end with the eventual
                          destruction of the eurozone and the euro."

                          Good to see a bit of optimisim around the place - it's the matter-of-factness in the above that hits home really - interesting times ahead!

                          Trust is good; control is better. V I Lenin.

                          Comment


                            #14
                            Ain't got no....
                            Gwan Joe!!

                            Comment


                              #15


                              irishtimes.com - Last Updated: Wednesday, March 23, 2011, 12:16


                              Bond yields climb on fiscal concerns
                              Bond yields rose today as concerns persisted over the euro zone's financial crisis.


                              Irish 10-year bond yields moved above 10 per cent this morning, and two-year notes fell on concern a permanent solution to the fiscal crisis will elude European Union leaders meeting at a summit starting tomorrow.


                              The bonds of the euro zone's most-indebted nations edged lower too.


                              The declines drove the yield on two-year notes to more than 10 per cent for the second consecutive day, while the extra yield investors demand to hold the nation's 10-year bonds instead of German bunds climbed to a record. By 12.18pm, they had reduced from 10.185 per cent to 10.05 per cent.


                              Portuguese bonds slid as prime minister Jose Socrates faces a vote today against his deficit-cutting plan that may spur early elections and the need for an EU bailout.


                              "It's death by a thousand cuts," said Charles Diebel, head of market strategy at Lloyds Bank Corporate Markets in London. "We're waiting for Portugal. There isn't actually a solution to the problem. Yields remain at unsustainable levels, technically forcing insolvency."


                              The yield on the Portuguese 10-year bond climbed 10 basis points to 7.59 per cent, with the similar-maturity Greek yield up four basis points to 12.56 per cent.


                              Portugal's lawmakers will discuss the government's program of austerity measures at 3pm in Lisbon. The opposition Social Democratic and Communist parties both pledged yesterday to table resolutions against the plan.


                              "The likelihood that the Portuguese government will fall this week looks high," Nicola Mai, a London-based economist at JPMorgan Chase and Co, said in a note yesterday. "This suggests that the sovereign will likely access" the EU's rescue fund "in the near term, despite the current government's efforts to avoid this outcome."


                              The yield on the bund fell three basis points to 3.23 per cent, with the price rising €2.30 per €1,000 face amount. The two-year note yield dropped two basis points to 1.68 per cent.


                              Germany sold an additional €3.4 billion of the 10-year bund, the euro-region's benchmark government security, at an average yield of 3.24 per cent. Investors bid for 2.2 times the amount of bonds on offer, up from a so-called bid-to-cover of 1.9 at the previous auction of the securities on February 16th.


                              Investor demand for the bonds was "very strong," Chiara Cremonesi, a strategist at Unicredit Bank AG in London, said in an e-mailed note. "Risk aversion, mainly driven by peripheral jitters, the fact that this will be the last reopening of this benchmark, may have been supportive factors for demand."


                              German bonds had declined this week as European Central Bank policy makers including president Jean-Claude Trichet reiterated that they may raise interest rates as soon as next month to contain an inflation rate that has quickened past their 2 per cent target, even as the region grabbles with a debt crisis that forced Greece and Ireland to seek outside aid.


                              German government bonds have handed investors a loss of 1.8 per cent this year, with US Treasuries returning 0.5 per cent, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg. Greek bonds returned 1.4 per cent even as they lost 1.1 per cent this month. Irish securities have lost 4.2 per cent this year, while Portuguese debt dropped 4.1 per cent, the EFFAS indexes show.


                              Additional reporting: Bloomberg


                              Excellence is hard to keep quite - Sherrie Coale

                              Comment

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