Lighthouse Investment Management

Publications

Category: Central Banks

Archive

Categorise

Recent Posts

Tags

CAPE earnings elections events growth PER stock market stocks valuation value

  • 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…

    Know More

  • 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…

    Know More

  • European Periphery on Fire

    Alexander Gloy

    Greek 10yr yields surge to 11.71% (from 11.35% a week ago) after reports of EUR 4bn deposits having left the Greek banking system in August. Greek 10yr government bond yield. Source: Bloomberg.com In the US it is illegal to call for a bank run, so all I am going to say is that if you…

    Know More

  • BoJ emergency meeting

    Alexander Gloy

    The BoJ (Bank of Japan) announced an emergency meeting for 5am GMT Thursday. According to rumors the recent strength in the Japanese Yen and falling share prices will force the BoJ into further “monetary easing” (read: printing money). Gold owners should rejoice – all major Central banks have now boarded the train of self-destruction. To…

    Know More

  • Irish crisis averted – for now

    Alexander Gloy

    Huge sigh of relief after Ireland managed to sell EUR 1.5bn fresh debt today (how much of that was bought by the ECB?). Irish CDS tightened 28bps to 275. Still, spreads are elevated, and it would be ludicrous to assume that more debt could cure an indebted nation. The European periphery had generally lower bond…

    Know More

  • European periphery on fire

    Alexander Gloy

    The European periphery is on fire. While German 10yr government bond yields declined to 2.33% (-0.06), Irish were unchanged at 5.31% and Greece widened to 10.67% (+0.19). Credit Default Swaps widened on Italy (from 130 to 200 within 2 weeks), Ireland (from 200 to 300) and of course basket-case Greece. Ireland will try to sell some…

    Know More

  • Friday 13th – predictions for the next 13 years:

    Alexander Gloy

    It’s Friday 13th, so here’s how things are going to pan out over the next 13 years: Greece is a tragedy. On May 7th they were already priced for a 30% haircut, and the banks prohibited it. So instead of dealing with EUR 210bn in debt (300bn *.7) they will be looking at 450bn in…

    Know More

  • ECB intervening in Irish Government Bonds?

    Alexander Gloy

    Stock markets falling word-wide, bond markets surging (prices up, yields down) – except a few outliers, like Ireland. Take a look at the intra-day yield of 10 year Irish government bonds; big rise, then sudden stop. Rumors of ECB having stepped in and buying Irish government bonds. To me, the chart looks like those rumors…

    Know More

  • How much longer will stocks be able to ignore signals from the bond market?

    Alexander Gloy

    FOMC (Federal Open Market Committee) met today, announced the reinvestment of maturing mortgage-backed securities into longer-dated Treasury bonds (2-10yr). Fed language unchanged (“to keep interest rates low for an extended period”), but economic outlook a bit gloomier. Bonds rallied, with US 10yr yield down to 2.78%, but stocks closer lower. This is logical, as no…

    Know More

  • IMF talks with Hungary suspended

    Alexander Gloy

    The IMF on Sunday suspended talks with Hungary over disagreement on 2011 budget deficit (Hungary wants more than 3.8%, IMF says 3% max). Hungary had asked for EUR 20bn from IMF, EU and World Bank in October 2008 after other sources of financing dried up. It is highly unusual for a country to let negotiations…

    Know More