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Realistbear

Contagion Spreads To Italy As Bonds Soar

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8169225/Contagion-strikes-Italy-as-Ireland-bail-out-fails-to-calm-markets.html

Financial Crisis
Contagion strikes Italy as Ireland bail-out fails to calm markets
The EU-IMF rescue for Ireland has failed to restore to confidence in the eurozone debt markets, leading instead to a dramatic surge in bond yields across half the currency bloc.
Spreads on Italian and Belgian bonds jumped to a post-EMU high as the sell-off moved beyond the battered trio of Ireland, Portugal, and Spain, raising concerns that the crisis could start to turn systemic.
It was the worst single day in Mediterranean markets since the launch of monetary union.
..../
"The EU rescue fund cannot handle Spain, let alone Italy," said Charles Dumas, from Lombard Street Research. "We we may be nearing the point where Germany has to decide whether it is willing take on a
burden six times the size of East Germany,
or let some countries go."

Non-event as far as FOREX is concerned. Long overdue run on the Euro?

Edited by Realistbear

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Yields on 10-year Italian bonds jumped 21 points to 4.61pc, threatening to shift the crisis to a new level. Italy's public debt is over €2 trillion, the world's third-largest after the US and Japan.

If they go after Italy there won't be any more bailouts.

Monopoly money all round then.

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It's contained in the sense it's just going to affect those nations with stupid amounts of national debts.

The markets are bailout junkies now, they need their fix.

the guy from Wikileaks claims to have something on the banks. http://www.repubblica.it/esteri/2010/11/30/dirette/wikileaks_30_novembre-9667664

also, yes, my fellow countrymen are panicking

http://www.repubblica.it/economia/2010/11/29/news/ue_pil_italia_1_1_nel_2010_e_2011-9638090

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Its basically suicidal to me for a nation state to be issuing debt in a currency that it cannot print. Bond investors are showing by actions they would rather invest in the USA and the UK, even though those economies seem weaker than Europe.. because at the end of the day those nations can always print enough to meet the payments.

The old argument was bond vigilantes would get scared of inflation and drive up the rates for the UK and the USA.. but the opposite has happened. That power to print is very attractive to bondholders.

At some point I think the EU will have to either print or accept dissolution. And its not certain they will print, Germany especially does not want to give that power to the EU state.

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All the mortgage and other dross lending has been converted to sovereign debt, that debt is now beginning to be marked at its real risk rate, so much of the stuff has been created not even the backstop of having entire nations funding the repayments is enough to falsify the figures.

The great hope of the MBS market coming back and splashing billions back into the bubble is finished, there is nobody dumb enough in the room to do so unless back by country size funding which isn't going to happen becuase they can;t even digest what they have already swallowed.

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Its basically suicidal to me for a nation state to be issuing debt in a currency that it cannot print. Bond investors are showing by actions they would rather invest in the USA and the UK, even though those economies seem weaker than Europe.. because at the end of the day those nations can always print enough to meet the payments.

The old argument was bond vigilantes would get scared of inflation and drive up the rates for the UK and the USA.. but the opposite has happened. That power to print is very attractive to bondholders.

At some point I think the EU will have to either print or accept dissolution. And its not certain they will print, Germany especially does not want to give that power to the EU state.

There is another old adage: Don't bet against the Fed.

Bernanke may not be the fool many think he is.

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Care to translate what Wikileaks supposedly have?

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There is another old adage: Don't bet against the Fed.

Bernanke may not be the fool many think he is.

Even though areas of anglo-saxon nations are in trouble.. one thing we have is understanding of markets and finance. New York and London are the two world capitals of money.

While the Germans running the EU are so strong in many areas like infrastructure, manufacturing, chemistry, they seem pretty weak on understanding money. Like remember the summer of 2008 when things were breaking down and the ECB raised rates?

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Even though areas of anglo-saxon nations are in trouble.. one thing we have is understanding of markets and finance. New York and London are the two world capitals of money.

While the Germans running the EU are so strong in many areas like infrastructure, manufacturing, chemistry, they seem pretty weak on understanding money. Like remember the summer of 2008 when things were breaking down and the ECB raised rates?

thats right, we totally understand and chose to stop the overlending well in advance.

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Care to translate what Wikileaks supposedly have?

Only a snippet, but basically the man claims to have substantial info on big banks and big corporate, and will release some of that in January to promote more "ethical" business and help honest workers.

We'll see. I am sure it will be nothing more than what Taibbi has already revealed.

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Even though areas of anglo-saxon nations are in trouble.. one thing we have is understanding of markets and finance. New York and London are the two world capitals of money.

While the Germans running the EU are so strong in many areas like infrastructure, manufacturing, chemistry, they seem pretty weak on understanding money. Like remember the summer of 2008 when things were breaking down and the ECB raised rates?

There is a million miles between a ******-headed banker writing unpayable loans and going with a begging bowl to the taxpayer and producer creating a market for a product in a global market and succeeding due to ability.

Edited by OnlyMe

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Only a snippet, but basically the man claims to have substantial info on big banks and big corporate, and will release some of that in January to promote more "ethical" business and help honest workers.

We'll see. I am sure it will be nothing more than what Taibbi has already revealed.

Excellent so until January they can remain "unethical" then?

Never quite get this I have claims but you'll have to wait a few months before being able to read them....

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Even though areas of anglo-saxon nations are in trouble.. one thing we have is understanding of markets and finance. New York and London are the two world capitals of money.

While the Germans running the EU are so strong in many areas like infrastructure, manufacturing, chemistry, they seem pretty weak on understanding money. Like remember the summer of 2008 when things were breaking down and the ECB raised rates?

Yeah - sometimes i wonder if the Germans were even trying to fold the entire economy into a housing boom. Total amateurs

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Excellent so until January they can remain "unethical" then?

Never quite get this I have claims but you'll have to wait a few months before being able to read them....

"Hype" is everything I guess.

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There is another old adage: Don't bet against the Fed.

Bernanke may not be the fool many think he is.

The only true bet against the Fed is gold.

And the reason for that adage is to stop you placing that bet, they dont want any old Tom Dick and Harry winning again and again.

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What would happen if we let some countries just go bust.......would it really be that bad.

Iceland went bust, that wasnt too bad.

Lehman's (not a country I know) went bust, that wasnt too bad, though the bankers tell us it was.

I think that the problem is that the domino's of debt keep falling if something happens. If Ireland were to default, the I guess that RBS and Lloyds would go under, perhaps anyway, they might have all their loans guaranteed to Ireland. If they do have them guaranteed, then the pressure would fall on the state, as they then have to take all the losses.

Then what happens is that the bond market gets jittery about the UK's ability to pay its debt, and interest rates rise on loans to the UK state as a result of those fears. The UK could not pay a high rate for any period of time without reducing total debt, because the interest piled on top of interest will make that debt burden unpayable. The UK then can either balance the budget or run a surplus, or print money. If it does the latter we get hyper-inflation. If it does the former, we have really savage cuts, and that will take out things like pensions and social security, and a trimmed down health service.

I suppose that another way out for the government would be to default itself. Of course if it does that, then most private UK pension schemes immediately become insolvent, as do all UK insurance companies.

That is where we reach the point of who takes the losses. I dont see how we can get out of a situation where pensioners are hit. All roads seem to lead to them having to take a loss somewhere. Either through benefit reductions, or losses on bonds that our held in their benefit, or inflationary losses on savings, or a mixture of all three.

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Sorry, I had to 'big up' what you said as very few people on here get that. They still think interest rates are going to go up and they are going to get a pain free house price crash.

I don't think most people on here think that at all. Most of us realise that it's all screwed, and that those in charge will seemingly do anything to prevent asset prices falling regardless of the long term damage.

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sip

That is where we reach the point of who takes the losses. I dont see how we can get out of a situation where pensioners are hit. All roads seem to lead to them having to take a loss somewhere. Either through benefit reductions, or losses on bonds that our held in their benefit, or inflationary losses on savings, or a mixture of all three.

there is only one place money comes from, there is only one place wealth comes from.

Its the people.

therefore, the losses will fall on the people, whichever route they take.

what is happening is a battle between groups trying to each lose as little as possible, which means that other groups will lose more.

Sadly, the ones that caused the problem, the OVERLENDERS, are the ones getting the most benefit....a default would see THEM eat their cooking...but, the fallout, whilst it may be bad for most people, would be less than if the majority of the wealth is pushed onto these sharks....

This is how revolutions begin...starving in the streets looking through restaurant windows at the criminals that got all the rescue.

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there is only one place money comes from, there is only one place wealth comes from.

Its the people.

therefore, the losses will fall on the people, whichever route they take.

what is happening is a battle between groups trying to each lose as little as possible, which means that other groups will lose more.

Sadly, the ones that caused the problem, the OVERLENDERS, are the ones getting the most benefit....a default would see THEM eat their cooking...but, the fallout, whilst it may be bad for most people, would be less than if the majority of the wealth is pushed onto these sharks....

This is how revolutions begin...starving in the streets looking through restaurant windows at the criminals that got all the rescue.

common misheld belief , ithey dont start via the starving in the street, the french revolution started when one of the guys in the restauranrt received some outdated Foie gras

Edited by Tamara De Lempicka

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It's contained in the sense it's just going to affect those nations with stupid amounts of national debts.

The markets are bailout junkies now, they need their fix.

Agreed. Moral hazzard, precedent set, onto the next.

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"Hype" is everything I guess.

One of the Wikileaks lawyers was on Newsnight last night and he said the delay in releasing material was so they can check facts, make sure no individuals are named or are able to be identified etc where as World leaders etc have armies behind them so they don't care about them being named.

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there is only one place money comes from, there is only one place wealth comes from.

Its the people.

therefore, the losses will fall on the people, whichever route they take.

what is happening is a battle between groups trying to each lose as little as possible, which means that other groups will lose more.

Sadly, the ones that caused the problem, the OVERLENDERS, are the ones getting the most benefit....a default would see THEM eat their cooking...but, the fallout, whilst it may be bad for most people, would be less than if the majority of the wealth is pushed onto these sharks....

This is how revolutions begin...starving in the streets looking through restaurant windows at the criminals that got all the rescue.

It is very difficult to push the losses onto the crooks. First of all you need fraud investigations, I see none in the UK.

And then a lot of the crooks have made their money by paying themselves huge bonuses for making fraudulent and unprofitable loans. Taking that money back would come up against all sorts of laws. These crooks use the legal system to make their crimes profitable and irreversible.

I call for the introduction of unlimited liability for the directors of all banks that have deposits insured by the FSCS. And if they go bust, bankrupt them and their spouses. Do that, and the bank would be run profitably from the top as the directors have something to lose, and no legal protection.

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  • 312 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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