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Euro Bonds In World Of Trouble Again

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Over at calculated risk he has a great graph on Euro bond spreads over the German bonds. Greece, Spain and Ireland bonds are right back near the spreads they were at the worst of the Euro bond crisis in May. This time they have gradually snuck up.. on the chart that super spike in the spring is looking more like an over-eager spike as part of a long term trend of total breakdown than a one time event.

http://www.calculatedriskblog.com/2010/08/summary-fannie-freddie-autopsy-and.html

It will be interesting to see what the ECB does. I mean Greece is now 850 basis points above German bonds. Spain, Portugal and Italy are also above or near their widest spreads back in May.

There is thoughts emerging in Ireland this week that it may be beyond the reach of the government of Ireland to backstop the failing banks there. As the Irish government financing are breaking down and it looks like more huge losses are coming.

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Time for another rescue measure?

I caught the Slovak PM on the telly recently.

She said something along the lines that the Slovaks had to swallow some bitter medicince to recover from their near bankruptcy and has the moral right to say "no" to contributing to the bailout package, especially as an austerity program has left them as the "tiger of Europe" after a few years of pain. It is good to see that not all heads of state are Keynesians.

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I vaguely recall the ECB or some other body making a statement this year about being prepared to provide guarantees for distressed institutions to the tune of about 600 billion Euros ?

Wouldn't that be enough to underwrite Ireland about 15 times over for instance ? As regards this emergency facility, has any of it been taken up ? too small a fund ? I would like to know if that provision will buy time or if things are to go belly up real soon.

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I vaguely recall the ECB or some other body making a statement this year about being prepared to provide guarantees for distressed institutions to the tune of about 600 billion Euros ?

Wouldn't that be enough to underwrite Ireland about 15 times over for instance ? As regards this emergency facility, has any of it been taken up ? too small a fund ? I would like to know if that provision will buy time or if things are to go belly up real soon.

The problem is, it's all promises to borrow by other member states. Can all of them afford it? Will some be tapped/hit for more than others? Will other states think that the failing states have done enough to justify help?

There may come a point where some member states refuse to tow the line. I don't know what would happen after that, but it will put a lot of pressure on the Euro.

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Im wondering which idiot is buying the bonds?

Is he doing so at gunpoint?

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The ECB's emergency cash injection of 750bn gave the plates another quick spin but it seems clear that they are starting to wobble dangerously again. Woah! Did you just see Ireland take that wobble to the left, I thought it was about to fall off the stick for a minute! :o

Imbalances were always going to be the fatal flaw in the EU. It is no USA where thre is a semblance of political and social cohesion and a long history of consensus going back to the late 18th Century. In the US the States are truly all in it together. In the EU the nation states are in it for themselves.

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The ECB's emergency cash injection of 750bn gave the plates another quick spin but it seems clear that they are starting to wobble dangerously again. Woah! Did you just see Ireland take that wobble to the left, I thought it was about to fall off the stick for a minute! :o

Imbalances were always going to be the fatal flaw in the EU. It is no USA where thre is a semblance of political and social cohesion and a long history of consensus going back to the late 18th Century. In the US the States are truly all in it together. In the EU the nation states are in it for themselves.

Its even more imbalanced now...Greece...borrowed a ton more, now have MORE debt, and so need MORE austerity.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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