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US Backs Egyptian Bond Issuance, Gives New $1 Billion Issue "Sovereign Guarantee"
Just because the US is having so much success convincing the world its debt is money good (but don't anyone dare count the $6+ trillion in GSE debt to the total US debt), the good old US of A has now decided to backstop the debt of... Egypt. Bloomberg reports: "Egypt plans to raise $1 billion by selling Eurobonds this year to diversify borrowing and finance a widening budget deficit after its economy was rocked by the worst political crisis in 30 years. The five-year bonds will be backed by a U.S. “sovereign guarantee,” Finance Minister Samir Radwan said by telephone from Cairo today...President Barack Obama promised last week $2 billion in loan guarantees and debt forgiveness." And when it comes to Uncle Sam giving his assurances to the developing world, size does not matter: "The size is not significant but the backing from the U.S. will help raise the money at a relatively inexpensive cost." Uh, should Congress perhaps have something to say about the fact that America is now somehow the guarantor of recently revolutionary African countries? Because if, heaven forbid, should the extremely stable and economically viable, but otherwise revolutionary Egyptian country suffer default and bondholders demand to be made whole, guess out of whose pocket the deficiency claims will have to be funded...
Says Bloomberg:
Egypt’s budget gap may widen to the highest level in more than a decade in 2012 after a popular revolt ended the three- decade rule of President Hosni Mubarak, according to the Ministry of Finance. The turmoil prompted tourists to flee, lowered the country’s credit ratings and raised borrowing costs.
The yield on Egypt’s 5.75 percent dollar bond due April 2020 rose 2 basis points, or 0.02 percentage point, to 5.89 percent at 2:01 p.m. in Cairo. The rate plunged 33 basis points on May 19, the day of Obama’s aid announcement. The cost of insuring the country’s debt against default climbed 7 basis points to 332 today, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
Luckily, since the domestic bond ponzi in Egypt has not been set up yet and no Primary Dealers operate in the country, the only option is the global banking cartel:
The planned Eurobond sale “may satisfy short-term financing needs but the American backing limits the ability of Egypt as an independent entity to ask for funds in the international market in the long term,” said Moustafa Assal, head of fixed income at Beltone Financial, a Cairo-based investment bank. “At the moment the aid is welcome because Egypt has no choice but to go to the international market to get the economy back on its feet.”
But, but, can't the wonderful Japanese model (which by the way no longer works) of excess savings reinvested be transplanted to Egypt?
In the meantime, the US is merely backstopping paper by another government, which will soon be very much insolvent, and probably also need an ECB bail out for good measure. Because, you know, M.A.D...
The North African country had $35 billion in external debt at the end of 2010, according to data on the central bank’s website, making up 14.7 percent of gross domestic product. The government depends on the sale of treasury bills to finance the deficit, which may reach 11 percent of GDP in the fiscal year ending June 2012, according to finance ministry data.
The ministry has struggled to raise its targeted amounts at weekly auctions of t-bills since the uprising as yields soared.
Yesterday it raised 2.825 billion pounds ($474 million) of the 5.5 billion pounds sought by selling three-month and nine-month notes. The average yield on the 252-day notes climbed to 12.869 percent, the highest since November 2008.
Lastly, all of this may be moot. As we observed last week, May 27 may be the day when the second Egyptian revolution hits. And confirming this, below is a copy of a poster put up on Tahrir square highlighting the specific demands that already disillusioned revolutionaries are having with the current system. Note that US bond guarantees are not among the demands.
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That's what I've always said. There won't be any sovereign, or even muni default during the coming years. Too many powerful interests are at stake.
Youre in for a rude awakening soon fucktard.
If I can't trust an anonymous internet troll, who can I trust? Hamy, sell me bonds.
I honestly believe now is the time to buy muni bonds, especially Illinois and California bonds. They have been way oversold during the last months, and have yet to cope with the incredible economic recovery in those States.
Ignore my advice at your own peril.
dude your crazy, i live in california and no one is buying california bonds in fear of defult. Every year for the past 3 years california has been finding new ways in explaining to people why they get IOU's instead of checks in the mail at the end of every budgit year.
You got hamyed, dude.
Harry's been away too long, so people aren't getting the soo-nami of sarcasm that is Hamy.
Harry's been away too long, so people aren't getting the soo-nami of sarcasm that is Hamy.
Not sure about Illinois but it would take a change to the state Constitution to default on GO bonds in California.
Not that the fuckers wouldn't try it.
In CA the Constitution validates and " guarantees "many ponzis. Education, public pensions, GO bonded debt. They are all up front tied together in a sinking life boat.
Illinois and California are two of the most unstable land masses in America
Nothing like a decent bit natural disaster to blame hyperinflation on.
Don't forget NV bonds, Hamy. lmao
@HamyWanger
You can't be serious. I just got elected as one of nine alderman in Illinois' ninth largest city. My city is broke and the state is much worse off. Our fucking governor is talking about reducing or eliminating municipal revenue sharing(the state giving back what they take from the municipalities) which would mean a 2 million dollar budget hole for us in 2012. The state raised income taxes only to give it back to our corporations who are now threatening to leave the state. If you compare workmans compensation costs with our great lakes neighbors, Illinois IS number one by a factor of 7 to 10 times. So fuck off you idiot.
Hamy is a clever Zerohedge contrarian, so don't take anything he says seriously.
You're kidding right? I don't know about Illinois, but California is quite possibly the worst state to be buying that stuff right now.
You are killing me Hamy!
So your a buyer of anonymous internet troll bonds, bunds, treasuries and other labor asset backed goodness.
Well then I have a debt instrument for you :)
I have a .9999 gold and .999 silver lettered labor backed and future tech backed device that is sure to please.
: please note actual lettering and backing may be equal or less then what is stated. All complaints may be ignored or referred to the IMF, world bank or a namless hobo, junky or maid in the area of our choosing.
Off Topic, but an alert to Tyler
Supreme Court Orders California to release up to 45,000 Prisoners
This is bad juju for California Citizens.
Oh no, they let a couple thousand marijuana users out of jail! What will we ever do!?!
More minimum wage earners to supplement the work force that has the illegals running back across the border.
Can't cut out cops and ff's now with all the crooks and pyro's running about.
Surely these people have paid their debt to society and will return to their old neighbor-hoods to become valuable, contributing members to Californian society.
A great day, indeed.
You know when you fish and you catch and release that you often catch the same fish multiple times. That's what this is. Catch and release for cops
Hang 'em...
Why don't we have MORE Black and Brown people locked up?
After all, more people imprisoned than any civilization at any time in the course of human history is such an achievement. Just look around at all the the shit we have to protect!
Prisons rank right up there with all the landfills as the real gifts given to us by 5 centuries of glorious Capitalism.
This is the American generosity we have grown to expect and love...
Here is a good metaphor for the USA:
http://www.realclearpolitics.com/video/2011/05/23/oops_obamas_beast_limo...
This one has better sound:
http://news.yahoo.com/video/world-15749633/25316843#video=25318039
Now if only we can get the money back that we loaned to Haiti... Oh wait that was forgiven.
Hope the chinese have it in their hearts to forgive our bad investments too.
If I lent you toilet paper I would forgive it too, lest you give it back used
The House of Saud, has also dumped 2B into the Egyptian hole.
No moral hazard here
We are WAY beyond moral hazard here.
This is Moral Vacuum.
Well, that sucks.
Fortunately a guarantee doesn't count as against the debt ceiling. All good, just get more debt out there. Can the Fed buy it if it is guaranteed by the treasury dept? What a virtuous circle.
Who's going to stop them?
$1 billion? Chump change, hardly a few seconds worth of The Bernank POMO'ing stock and bonds.
exactly...in the meantime, not sure what is going on w/markets down and gold up...
i keep checking to see if any yachting accident happened Sunday but nada...wonder if the boys made it to work today... any clue anyone?
I wonder where the Gold is that Mubarak fled the country with ended up?
After the (chief financier and donations gatherer) bin Laden's death, Obama simply has no choice but to backstop the incoming Muslim Brotherhood's government. It's sort-of a law in the middle east: if a married brother dies, the other brother who's single has to marry the wife of the deceased.
I shook my head when reading this yesterday. I suppose an extra two billion is a rounding error in the context of a$1.5T fiscal deficit. "No worries Egypt, my friend. Just charge it to my tab."
Just like in the movie Barfly: "Drinks for all my frieeeends!"
So S&P will have them at AAA?
How can we order the new regime around without controlling their money?
Now you guys be good boys and we will make sure the bills get paid, but if you are bad, no dollars for you.
gotta keep the coffers of the SCAF flowin in dough
Ok has eveybody got their giveaways done now? No? Ben wants to do QE3? OK Ben. Not Yet? Tim wants $2 trillion debt ceiling raise? OK Tim. Barry? Aid package to Europe? Ok we'll wait on that one.
What a cirlce jerk.
And people think the States won't get bailed out. What a laugh
Unless they're red states.
We better hope Obama doesn´t get to drunk in Ireland and offer them a few Trillion while under the "influence"..
LOL!
No worries, Mate. The Imperial Wookie will have her evil eye trained on his lips, assessing everything that enters his pie hole.
There's been another sighting -- and they managed to get a picture!
http://lunchtime-leftovers.blogspot.com/2011/05/imperial-wookie.html
ROTFLMFAO!!!!
I'm keeping that picture! You made my day!
Cheers!
Thanks for the plug!!!!
Eyes On The World
http://lunchtime-leftovers.blogspot.com/
This is insane!!! Can turbo Timmy do this without an act of Congress?????
Law doesn't matter.
What matters is preventing at all cost any big-scale default.
"Sovereign Guarantee" - if you loose your sovereign monopoly we're guaranteed to loose ours.
<< Law doesn't matter. >>
Perhaps that is why they are now trying to save at all cost?
They thought they where above the law.
You know, it's rational posts like this one that really detract from your ability to troll coherently. ;-)
Indeed Congress has completely lapsed in all its responsibilities. Why aren't the Repubs all over this like stink on shit?!
From my viewpoint, I don't have a problem with debt forgiveness per se, but guaranteeing new bonds seems crazy. Of course, I think all the IMF bloodletting, er, loans should be canceled anyway. I can't think of a nicer bunch of vampires to be unemployed.
Who said anything about "responsibilities"???
I thought I was just doing this for the free perks & cavalcade of hookers!
that's a Jewish law, from the Bible. not an Arab law. idiot.
Protip: Before calling someone an idiot, it's best to make sure you're replying to them. Otherwise...
Markets are "off the lowz" especially oil. USO has bounced furiously off the same level, 38.03, that it did on Friday. Closed Friday about 4% off the lows, wonder what today holds...
LOL!!
Aaaaahhh, never mind all that.
How about a Guinness?!-
Hope Egypt games the system and buys gold. That's what I would do, borrow against the inevitable fiatsco collapse.
Debt forgiveness? I could use some of that, but then again I don't got oil... Hmmm, does Egypt? hehe.
egypt should use the money to buy oil futures, then increase the tensions in MENA, and cash out with a huge profit
I recall not being allowed to dip their toe into the Saudi oil pool.
U.S. insurance?
Note that US bond guarantees are not among the demands. ~ Ummm? I can't read that.
:-( Translation please?
We are writing IOU's on other lousy bets backed with our previous crappy IOU's! What could possibly go wrong? Who's dumber - the US for backing or anyone that believes we're good for it?
I swear I can see Premier Wen laughing from my house.
I don't think he's laughing. He's sitting on $2 trillion+ of the same IOU's that are being handed out like penny candy now.
Your tax dollars at work!
????? ???????? ?????? ?? ?? ?????!
Who's working?
I am. I want to make sure I can generate enough tax dollars so I can pay my fair share to ensure Egypt bondholders get paid when Egypt defaults. I wouldn't have it any other way.
God bless patriotic Americans like you.
I'd like to help out, but I try and consume taxes instead of pay them. I like to think of it as a form of tough love.
You're not a government employee, are you?
I have decided to upstage the US of A and will lend Egypt 100 Trillion dollars !!! And to offset transaction costs it will be delivered in 1 single bill (http://cdn4.creditwritedowns.com/wp-content/uploads/2009/01/Zimbabwe-100...) via air mail
I hope we get the Pyramids as collateral....they will look good in Lake Havasu...next to the London Bridge...
Nah, we just need the keys to the Suez Canal.
Haven't felt too much anger about this entire fiasco, until now.
bond "diworseification", bitchez.
the Bernank better hope the glass is thick on his armored car.
When Hyper-Inflation comes, there will be a ton of people upset and will DEMAND those accountable for the destruction of everything they ever worked for.
Enter Mises
There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved
Fat Cats look pretty tasty from a starving persons point of view.
Bankster Foie Gras?
+1 , but sounds alot like a$$. lol
We all need to stop paying taxes, default on all bank loans and raise chickens. Every con needs a patsy. We need to stop being the victim.
Chickens? Well, okay, just make sure it's not those wascally wabbits....
http://www.prisonplanet.com/usda-fines-family-four-million-dollars-for-selling-bunny-rabbits.html
Until you stop Benron and Turbo Timmah (and all of their trading partners), every other attempt at fiscal warfare is moot.
Most people will talk tough , but when it comes time to do something like not paying taxes , well very few will step up to the plate
May have something to do with seeing what happened to those that did:
-Ed & Elain Brown
-Wesley Snipes
-Sherry Jackson
etc, etc, etc. Individually stepping up to the plate is virtual insanity. Only once critical mass is achieved (15-20% of the entire population) can such a thing be put into practice without paying the heaviest of prices.
Why is everything an all or nothing proposition? And besides, income tax is only one tax we're forced to pay.
Use a little imagination, think outside the box and think small. There are numerous ways to very legally pay less in taxes (some of these affect only state/local taxes but in my state, they're criminal enterprises too) such as: maximize your withholding, lower your income/tax bracket, drive less, buy used as much as possible, stop buying chinese junque and dustables, reduce energy usage, ask for cash discounts, grow your own, and the list goes on and on.
Further evidence that the USD is still "the fastest horse at the glue factory".
'US Backs Egyptian Bond Issuance, Gives New $1 Billion Issue "Sovereign Guarantee"' - this should be added to the definition of insanitiy in all psychology books
'US Backs Egyptian Bond Issuance, Gives New $1 Billion Issue "Sovereign Guarantee"' - this would not pass for a sub-title in a science-fiction book 10 years ago
'US Backs Egyptian Bond Issuance, Gives New $1 Billion Issue "Sovereign Guarantee"' - was the title of Paul Krugmans Noble Prise disseration
'US Backs Egyptian Bond Issuance, Gives New $1 Billion Issue "Sovereign Guarantee"' - says it all about the value of the dollar these days, you smell like those whom you sleep with
So the assclown who pontificated about "profit and earnings ratios" is now a master of F/X risk.
Next up, Renminbi-denominated US Treasuries, right before China actually "lets" its currency appreciate.
Barry must either be envious of Krugman's Nobel Price for Stupidity or he is trying to one-up Gordon Brown for "Dumbest Sovereign Trade of the Last Century".
He just wanted them all to feel like Peggy Joseph...
http://www.youtube.com/watch?v=P36x8rTb3jI
menafta
The Obama Doctrine. we'll pay you to end your revo on our terms, ok?
so, now, here's a few $ Bil for the military and the new guy. we're just trying to be fair, in a pro-democracy, human rights kinda kinder, gentler way. now, about that "revo" on the 27th?
MENA, BiCheZ!
Note that US bond guarantees are not among the demands. actually, i think if you re-check line 17,...
Euro and SnP near strong support
http://deadcatbouncing.blogspot.com/
NoMoMo Pomo. Perhaps a reverse repo might work as well if we're drawing straws for the next move.
Remove some excess liquidity from the markets...3...2...1 Wha? No need, move along.
Not surprising. That's the new regime's reward for collaborating with the Zionists.
http://desertpeace.wordpress.com/2011/05/15/the-new-egypt-continues-to-s...
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/8527455/Mahmoud-Ahmadinejad-says-Europe-stealing-Irans-rain.html
Yeah, and my ex stole my thunder long ago.
Why?
The government needs it to buy food. We want the stability.
Wait until the Egyptians find out their "Sovereign Guarantee" is only worth the paper that the money they borrowed is printed on. But who cares; when the relative market value of their debt goes to zero they will really have reason to go dancing in the streets.
How the fuck can Obama forgive $1 billion in debt, give $1 billion in loans and offer sovereign guarantee to $1 billion dollars of bonds for a military dictatorship without having the approval of Congress? I am outraged by this, enough so that I just wrote all my congress people. I doubt they'll do anything.
Do anything? If you keep empowering them, they can, and will stay drunk longer. That's about all you'll get for your trouble. Well, with enough pressure, they may be forced to rationalize Obummer's actions in order to present a unified, bi-partisan foreign policy (because we all know how important that is).
I'll be intersted in seeing how the Google conspirator guy reacts to a real revolution, instead of his astroturf sponsored, military coup.
Egypt is one of the Arab countries where the price of wheat, a staple in their food, is skyrocketing, so the US taxpayer is now going to give $$$ to Arabs in Egypt, Tunisia et al so they can outbid us for food.
I like that, ¡SI SE PUEDE!
But they have to do something to counter the counter-revolution. Isn't that worth a little tightness in your belly?
big surprise, today Egypt forced an aid ship bound for Gaza (which it had earlier blocked) back into international order. quid pro quo. not really hard to see whose interests are being served here.
AIPAC, Dems and Repubs all alike make obeisance. Watching Obama and Cantor Sunday was very telling about who runs .gov
i can't fathom how people in the U.S. are so easily fooled into equating israeli interests with U.S. interests. worlds biggest scam.
john,
Just ask yourself who owns Hollyweird and the newspapers and magazines, radio stations, overwhelmingly, well like Mortimer Zuckerman owns the New York Daily News, US News & World Report and and and, Canadian fellow who is a real estate magnate.
Between 2001 and 2003, Zuckerman was the chairman of the Conference of Presidents of Major American Jewish Organizations. Now just multiply Mort by a few hundred and you have your answer.
What makes you think anyone is fooled? They are criminals, and thus, are expected to act as such. The foolishness arises by those who falsely believe there is such a thing as "national interests" to begin with, instead of recognizing they are just means to an end for the criminals in power.
Did this piss you off?
Palestinians get $400 million in U.S. aidhttp://www.washingtontimes.com/news/2010/jun/9/palestinians-get-400-million-in-us-aid/
If it didn't piss you off it should have. This was blood money paid to Abbas for betraying the Palestinian people.
http://mondoweiss.net/2011/01/palestine-papers-reveal-pa-collaboration-w...
Americans have no idea what goes on, not a clue, and that is DELIBERATE
War on Iraq how much did that cost--and WHY?
$3 Trillion, boy what a bargain!
Our ally, who needs enemies?
Don't forget the failed coup in Gaza, with their lackey Dahlan.
What would it mean, exactly, for them to pay us back? In what currency?
It is good that, we, the American people, can reach out and aid our friends in Egypt in their time of need.
All of us are brothers in the eyes of God.
If there's a junta somewhere - anywhere - NaziRat wants a piece of the action.
Lighten up, Mahmoud.
I'm not the one stealing your rain.
It's all good, NaziRat. You rule because you support any junta, unconditionally.
That's why you're my pet rat.
It is good you learned a new word today. Knowledge is good.
Parroting it a dozen times kind of seems ridiculous though.
Do you get paid by the word?
I'll be standing by to find out what tomorrow's word will be.
You'n'dem be boyz, NaziRat, as always.
Holder, too.
Need to rephrase the title of this article to... America backs Egyptian Bonds with money from the Federal Pension Fund...Hahaha, they are not only using the furture funds to pay bills, now they are backstopping the world with it...
I wonder if this guarantee is somehow taking into consideration Egypt's policy towards Israel?
egyptian people are on to the fact that the military government is right back to supporting immoral U.S./Israeli policies. another day of rage is set for next week. U.S./Israel scheming in over-drive at this point, doomed to failure it appears.
I've always found wheat fills the belly much better than rage.
Your mileage may vary, of course.
No worries, it's all just funny money anyway - fiat, fractional reserve, unbacked junk. I say just give 'em $10 Billion. Then, just print up about another $5 Trillion or so for the U.S. and we can use that to pay off a few things, heck, just make it an even $10 Trillion.
Fuck Obama!
You first.
+1
Why don't we cut out the middle man and have China guarantee it
Do you really think it's Obama's call?
Really?
For real?
get in line
This is an absolute outrage! We're buried in a sea of debt, and the Teleprompter Tyrant offers our credit rating as a guarantee to a revolutionary government?
Impeachment NOW!
To a junta. Don't misrepresent what's going on here.
Are these Cleopatra Bonds backed by ...the pyramids?
...or the "good faith of the Egyptian gubberment?"
In any case, it's good to see we have so much money to throw around..."What Recession?"....that's what The Bernank wants to know
I promise to by a block if they title them:
"Muslim Brotherhood Bonds Insured by Barack Obama"
And insured by Barak's Uncle Sam for 6 DECADES.
Whoa!
That's longer than alCIAda's been running drugs!
If you hold the Arabic letter to a mirror and squint real hard, you can read what it says.
"Thank you Allah (Allah Akbar) for this renewable SNAP card from the U.S. Government, as we know well that any guarantee to repay infidel debt is invalidated in advance".
(moved)
Great work, TD.
"Too many powerful interests are at stake."
I hope I last long enough to see the ultimate failure of such unauthorized guarantee attempts by U.S. executive and administrative forces.
And the powerful, downfallen interests impaled on the stake for all to see.
So.... We put "Soverign status" on their debt.... But we can't pay our own.... Who guarantees our debt????? Er..... Eh..... Never mind....