Archive - Nov 2010

November 28th

Tyler Durden's picture

Ex Domestically Sourced Pension Funds, Blended Irish Rescue Interest Rate Is 7.25%





Everyone expected a number between 5% and 6.7% on the Irish rescue interest rate. However, when one considers that the NPRF, which will serve as a source of capital in the rescue package has a zero interest rate (Ireland will not be paying interest to itself), and amounts to 20% of the total bailout figure, it appears that the blended rate of new money is actually 7.25%. From politics.ie: "Presumably the pensions reserve funds are at 0%, as its already our
money. They form about 20% of the total amount. If one fifth of the
amount is at zero percent, and the average is 5.8% - what is the
interest on the rest of the money? I calculate 7.25%"

 

Tyler Durden's picture

Olli Rehn: No Haircuts For Senior Bondholders





So here is the Irish bailout in a nutshell: senior bondholders impairment: zero; Irish pensioners impairment: about 100%. Olli Rehn just confirmed during the press conference that senior bondholders will not be impaired. Irish taxpayers and pensioners to be overjoyed. Additionally, the maturity of the Irish IMF loan will be 7.5 years. This also means that the maturity of the Greek loans will likely be extended. Club Med will now exist indefinitely on life support, or until the euro is dissolved, whichever comes first. Lastly the pathologically lying sociopath just said that Europe will rerun its stress tests again next year... And as many times as needed until faith in Europe is restored, and 300 million austere Europeans finally believe their corrupt, thieving, fat ass politicians.

 

Tyler Durden's picture

Irish Government Statement On EU - IMF Programme for Ireland: Interest Rate To Be 5.8%





The State’s contribution to the €85 billion facility will be €17½ billion, which will come from the National Pension Reserve Fund (NPRF) and other domestic cash resources. This means that the extent of the external assistance will be reduced to €67½ billion.
...The facility will include up to €35 billion to support the banking system; €10 billion for the immediate recapitalisation and the remaining €25 billion will be provided on a contingency basis. Up to €50 billion to cover the financing of the State. The funds in the facility will be drawn down as necessary, although the amount will depend on the capital requirements of the financial system and NTMA bond issuances during the programme period. If drawn down in total today, the combined annual average interest rate would be of the order of 5.8% per annum. The rate will vary according to the timing of the drawdown and market conditions.

 

Leo Kolivakis's picture

Preparing for a Pension Riot?





Turning 60 stinks, and the joy of 65 appears to be slipping away...

 

Tyler Durden's picture

All The Latest On The Irish Bailout - Up To €17.5 Billion Of Rescue To Be Funded By Irish Pension Fund Contribution Redirection





Follow along as we track the news avalanche:

  • Official release from ECOFIN as paraphrased by the CEU: Euroarea financial support will be provided to Ireland.Three pillars: 1) an immediate strengthening of the banking system, 2) an ambitious fiscal adjustment to restore to fiscal sustainability, 3) growth enhancing reforms in the labor market, to allow return to sustainable growth.
  • Financial package will cover needs up to €85 billion: €10 billion for immediate recap measures, €25 billion on a contingency basis for banking system support, and €50 billion for budget needs. €17.5 billion will be financed by an Irish contribution from banking system and its pension fund (the NPRF). The remainder €17.5 will ceme from EFSF, UK, Scandinavian countries, and the IMF. 
  • Interest rate at about 5.8%
  • Precise interest rate to be in line with standard IMF pricing practices, and will be come next week
  • Olli Rehn: "Senior debt of bank bondholders will not be involved"
 

Tyler Durden's picture

It Starts: Live Telecast Of Eurogroup/ECOFIN Meeting On Bailout





The Europen Union Economic and Financial Affairs Council has prepared yet another webcast of the decision over Ireland which was supposed to start about 30 minutes ago. If prior delays are any indication we expect this session to start with an about 3-4 hour delay. Elsewhere, we are receiving rumors that Germany and France have suggested that bondholders suffer a haircut on their senior holdings, and "do not expect bondholders to accept the two countries' haircut proposal." What that means translated in any language we have no idea. Additional as per French finmin Lagarde, the only open item on the agenda is the interest rate to be paid out. As we speculated earlier, 6.7% if out of the question as it would mean revolution.

 

Tyler Durden's picture

Smart Money Preparing For Sell Off Like Never Before





Zero Hedge readers already know that in the latest week the insider selling to buying ratio hit unprecedented levels. Obviously, corporate officers and insiders have decided to take advantage of the artificial wealth effect and bail, especially since it is still unclear whether capital gains taxes will be the same in the following year. However, it is not only insiders who see between the lines. As the following charts demonstrate, the smart money is now either bailing from the stock market in droves or hedging for a market crash like never before...

 

Bruce Krasting's picture

Hot Money





What DID happen with this?

 

williambanzai7's picture

BaNZai7'S EuRo VaCaTioN





There's the Left Bank, kids.--Russ, I bet you can't guess what bank is on the right.--The Bank of America...

 

November 27th

asiablues's picture

Netflix: Will This Movie Ever End?





Netflix stock has really taken off since 2008 –up 800% in two years. Piper Jaffray raised target to $202 as the company is now setting sight on the streaming video business. Here is my take on this classic momentum stock.

 

Tyler Durden's picture

European Debt Crisis Cheat Sheet





Even as an ironic major snowstorm blankets most of Europe, the upcoming week will likely be one of the most heated in European history, as the untenable debtload of the periphery becomes increasingly irrelevant and more vigilantes start looking first on Belgium, then Italy, then all of the core (at which poin the EFSF will have run out), then finally America. Which is why to assist our readers with a one stop shop for all the relevant sovereign debt metrics out of Europe, we present the following exhaustive cheet sheat that covers all you need to know and then some on how the European collapse is likely to play out.

 

Tyler Durden's picture

Most Overhyped Black Friday In History A Dud? ShopperTrak Reports Just 0.3% Increase In Black Friday Sales Over 2009, Drop In Real Terms





The shopping day that was supposed to signal the renaissance of the US consumer, and justify the massive overhiring by US retailers (not to mention the completely dislocated from reality surge in stock price for razor thin margin retailers like Amazon), is increasingly seeming to be a dud. WSJ reports, citing channel checker ShopperTrak, that "Black Friday sales rose only slightly from a year ago even though more
shoppers visited stores, retail traffic monitor ShopperTrak said
Saturday, setting the stage for another uncertain holiday season for
retailers. Sales increased 0.3% to $10.7 billion, according to ShopperTrak, which
installs monitoring devices in stores to gauge traffic. Traffic rose by
2.2%, ShopperTrak said." For the observant ones out there, this is in nominal terms: adjusted for inflation there was actually a drop in end sales. Even so, the primary reason for the disappointment is that Black Friday actually started early on in the month, with most retailers offering comparable loss-leading deals such as those seen on the Friday after the national holiday early in November, reducing the actual purchasing power for the all important day. "The smaller than expected increase is due in part to discounts offered
earlier in November as well as online-only promotions, ShopperTrak
founder Bill Martin said.
Traffic to stores was up over 6% for the first
two weeks of November, an early boost that could affect retailers'
performance in the coming weeks, he said." Last but not least it should also be noted that with millions of Americans living mortgage payment free for over 18 months now, and using money that should be going to banks (and nationalized GSEs) to instead purchase shoe closet 32 inch TVs, that sooner or later the bulk of American taxpayers who funded yet another top line (but certainly not margin) bonanza for the nation's retailers may soon say enough, and vote against further subsidies of zombie companies whose existence allows for continued US consumer "strength."

 

Tyler Durden's picture

A "Who Is Who" Of Countries About To Fund The IMF's Bail Out Of Europe





When back in April we wrote about the huge expansion in the IMF's New Arrangement to Borrow (NAB) multilateral facility (which was expanded from $50 billion to over $550 billion), one of our observations was that "Funny money will galore. At this point nobody will allow anyone or anything to fail." And since all of Europe is about to be bailed out by the now insolvent ECB and the still somewhat solvent IMF, it strikes us as an opportune time to recall just who will bear the cost of this pan-European rescue. Surely, by now even idiots realize since the ECB is bailing out Europe, it is really bailing out itself, in a process described beautifully by Sean Corrigan recently, and any incremental money coming from ECB member countries will really go to themselves, and therefore its "new capital" contribution can be completely ignored. The same thing goes for European member countries of the IMF: that Ireland has pledged $2.9 billion to the IMF's NAB (not to mention Spain's $10.3 billion and Portugal's $3.4 billion) is late night comedy circuit fodder. Which is why it is not at all surprising that new capital will come from the US, Japan and China, in that order: the trio is about to spend over $250 billion (and soon much more) to rescue Club Med, as the Ponzi unwind shifts into a higher gear.

 

Tyler Durden's picture

Your One-Stop Guide To Frontrunning Monday's Double POMO





On Monday, Brian Sack will go for an all-out onslaught of Netflix and Amazon shorts. For the first time ever the New York Fed will hold not one but two monetization procedures. Incidentally both will focus on the part of the curve that in the past two weeks has been performing best: the sides of the belly. The two operations, expected to be about $2 and $7 billion, will focus on bonds in the 10-17 Y and 2.5-4 Y sector. In keeping with the tradition of sharing with our readers the bonds that Sack will almost certainly end up monetizing, we present the 10 cheapest bonds that will likely end up being acquired on Monday. As the Fed is now the largest single holder of Treasurys (since the announcement of the SOMA reinvestment program on August 10, the NY Fed has purchased a total of $124bn Treasuries / TIPS: of the $105bn scheduled for the current month, the Fed has purchased $48bn per MS) expect to see increasingly more detailed analyses of the Fed's SOMA composition as cartoons about how to front run the Fed become increasingly more popular.

 
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