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Author: Alexander Gloy

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  • Ireland: Rumors, rumors… and spread widening

    Alexander Gloy

    Here we go again: Irish 10yr government bond yields 6.27% (+0.23) this morning after article in the Irish Independent about possible IMF intervention. Rumors of Anglo Irish Bank going bankrupt. 10 year Irish government bond yield. Source: Bloomberg.com Portugal 10yr now at 6.07% (+0.11), highest since May.

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  • More on BoJ intervention; Swiss unions demand same

    Alexander Gloy

    According to rumors the BoJ (Bank of Japan) last night spent JPY 100bn ($1.16bn) on currency interventions. The Yen weakened by 3%. Will the BoJ be successful? The Japanese trade balance is positive by JPY800bn per month (or JPY 40bn per trading day) meaning they would have to buy half a billion USD per day…

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  • BoJ intervenes to weaken JPY

    Alexander Gloy

    BoJ (Bank of Japan) intervenes for the first time since 2004 in the currency market after the Yen reached at 15-year high versus the USD (hurting Japanese exporters). According to rumors they are throwing JPY 200-300bn (USD 2.4-3.6bn) on the market. Not huge, but it draws a line in the sand. Unless other central banks…

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  • Gold reaches new all-time high

    Alexander Gloy

    Gold reached a new all-time high on Tuesday. Two broker reports were speculating about the possibility of further “quantitative easing” (= printing money) by the FOMC (Federal Open Market Committee), either after its meeting in September (21st) or November (2-3rd). Stock markets initially greeted the rumors with enthusiasm. But if those rumors were true, the…

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  • Greece: “oops I did it again” – but only for 6 months

    Alexander Gloy

    On Tuesday Greece sold 26 week bills with a yield of 4.82% (vs 4.65% in July). Six months is the longest debt Greece can currently sell. Any longer maturities would cost more than the 5% level they are currently paying for the EU bail-out. Today the 10yr government bond yield was unchanged at 11.37%. Wasn’t…

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  • Greece still imports EUR 3 for every EUR 1 it exports

    Alexander Gloy

    As John Mauldin (http://www.frontlinethoughts.com/) thankfully points out in his latest newsletter Greece still imports three times (!) as much as it exports. No surprise here as the Euro does not allow them to regain competitiveness by devaluation. Germany benefits from a weak Euro, but Greece’s trading partners are mostly inside the EUR block. An average…

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  • Deutsche Bank increases capital by 50% as Basel III rules announced

    Alexander Gloy

    On Sunday, G-10 Governors and Heads of Supervision (GHOS) reached an agreement on new guidelines for banks, issued by the “Basel Committee on Banking Supervision”, also known as “Basel III”.: Took them 2 years after Lehman to realize the refined rules of “Basel II” were a joke (and almost led to a melt-down of the…

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  • We have no clue about what is going to hit us next

    Alexander Gloy

    Google trends on the Greek crisis: 12 months ago nobody cared. Then, suddenly, it’s on the front page of the Financial Times. Lesson learned: we have no idea which financial bomb is going to blow up in our faces next. Argentina? Venezuela? Hungary? Ukraine? Ireland? Social unrest in Greece? Search term “Greek crisis”. Source: Google…

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  • A deeper look at the EUR 80bn Greek bail-out treaty

    Alexander Gloy

    The EUR 80bn bail-out treaty from Greece (42 pages) is an interesting read. Among the countries providing credit are such pillars of wealth and stability like Ireland, Spain, Cyprus, Luxembourg, Malta, Portugal, Slovenia and Slovakia. The Slovak parliament in August voted not to participate. Not to be disrespectful of small countries, but Cyprus and Malta will…

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  • Never get a mortgage in a different currency than your income

    Alexander Gloy

    Poor Hungarian souls who financed their house with Swiss Franc mortgages before the financial crisis (80-90% of all new mortgages in 2006 and 2007; interest rates were as low as 3% compared to 12% in HUF). Not only has your debt increased by 50% in local currency, but your house is probably worth less, too.…

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