News & headlines from the day
The First BRIC to be Downgraded to Junk?
A land grab shrouded in a banking takeover, wrapped in a financial crisis "rescue." As always, insiders get first dibs. (And, yes, there is an MF Global connection.)
All you need to read and some more.
The end game of this global monetary crisis is the imposition of a 100% digital monetary system that would permanently end what little economic freedoms we still retain today. Educate. Resist. Fight Back. Win.
- Germany shifts, gives Spain more time on deficit (Reuters)
- Europe must prepare an emergency plan (FT)
- EU Spain reveals €100bn capital flight (FT)
- Spain’s Guindos says future of Euro at stake in Spain (Bloomberg)
- ECB, EU officials warn euro’s survival at risk (Reuters)
- China can ‘cope’ if Greece exits Euro, NDRC Researcher says (Bloomberg)
- Japan Warns Against Rising Yen (WSJ)
- Global stocks investors head for exits (FT)
- Hot Copper Shorts Burning Commodity Firms (Caixin)
- Dublin in final push for EU treaty Yes vote (FT)
- Spain cries for help: is Berlin listening? (Reuters)
- Crisis draws squatters to Spain's empty buildings (Reuters)
- EU World Bank Chief Urges Euro Bonds (WSJ)
- but... EU: Current Plan Is Not To Let ESM Directly Recapitalize Banks (WSJ)
- Graff pulls Hong Kong IPO, latest victim of weak markets (Reuters) - was MS underwriter?
- EU Weighs Direct Aid to Banks as Antidote to Crisis (Bloomberg)
- Dewey's bankruptcy: Let the rumble begin (Dewey)
- More are cutting off Greek trade: Trade credit insurers balk at Greek risk (FT)
- Rosengren wants more Fed easing; Dudley, Fisher don't (Reuters)
- EU throws Spain two potential lifelines (Reuters)
- Fed's Bullard says more quantitative easing unlikely for now, warns on Europe (Reuters)
Following the morning in Europe, a generally risk-off tone is observed, with stock futures sitting just above session lows and the German Schatz auction resulting in record low yields. Some of the risk-averse moves were noted following unconfirmed market talk that a troubled Dutch housing association may be pressed towards bankruptcy, however this seems to be linked towards an article concerning the Dutch central bank probing into the sale of derivatives to the housing group Vestia. Nonetheless, the long end of the Dutch curve remains well-bid and European 10-yr government bond yield spreads are seen generally wider across the board. Releases from the UK have come under particular focus; the BoE minutes showed an alongside-expectations vote of 8-1 to keep QE on hold. With some analysts estimating more of a lean towards further asset purchases, the initial reaction was strength in the GBP currency, but countering this effect was the parallel release of UK retail sales, with the monthly reading showing the sharpest decline since January 2010. Additionally, it was noted that several members of the board saw further QE as a finely balanced decision, placing GBP/USD back on a downward trajectory and briefly below 1.5700. Elsewhere in foreign exchange, current sentiment is reflected in EUR/USD, printing multi-month lows earlier in the session of 1.2615, with the USD index at 20-month highs which in turn has weighed on commodities.
- Rajoy to ask for ECB assistance, according to reports (Sharecast)
- Bundesbank Suggests Greek Exit From Euro Would Be Manageable (Bloomberg)
- Unemployed Burn as Fed Fiddles in Debate Over Natural Rate (Bloomberg)
- Regulators, investors turn up heat over Facebook IPO (Reuters)
- China to boost private energy investment to bolster economy (Reuters)
- OECD fears euro woe to snap brittle world recovery (Reuters)
- China slowdown threatens Australia - World Bank (Herald Sun)
- Guessing game begins over next Treasury chief (Reuters)
- Italians spurn main parties in local polls (FT)
- A fragile Europe must change fast (FT)
- Spain to outline Bankia plan, may announce bailout size (Reuters)
- China Should Adjust Policy Early - Government Researcher (WSJ)
If China Backs Its Currency with Gold, It Could Have Profound Effects for Investors … and Consumers
If indications become reality then we are faced with a leftist government in Greece that will either renegotiate a new bailout agreement with Europe or it will head back to the Drachma or be forced there by the refusal of European Union to provide any additional funds. In Spain we are faced with bare bones arithmetic where the country cannot bailout its Regional debt and its back debt because they do not have the capital to do either; much less both. Both countries can flop about for a brief period of time but the conclusions are unavoidable we are afraid and so a very unpleasant landscape awaits us in the coming days. We have warned about all of this for quite some time and we have hammered upon it in recent days as equities, credit/risk assets, the Euro have all declined in value as I had predicted. There may well be a bounce or two along the way but we continue to maintain that dark days lie ahead based not only upon fundamentals but based upon a union in Europe that has been deceptive in presentation and deceitful in practice.