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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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  • 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…

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  • 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…

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  • 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…

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  • 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…

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  • 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…

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  • 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…

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  • A failed auction at the ECB spells trouble

    Alexander Gloy

    The European Central Bank just experienced a failed auction. A failed auction means that you did not achieve to sell a predetermined amount of securities to the market. Here, the ECB wanted to mop up EUR 55bn in liquidity (to “sterilize” a similar amount of European government bonds they bought) and received bids for less…

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  • Joke du jour: Greece to tap markets for more money

    Alexander Gloy

    “Greece will go to the markets mid-July, issuing T-bills of three, six and twelve months,” Deputy Finance Minister Philippos Sachinidis told Reuters. Wasn’t the EUR 110bn bail-out meant to prevent Greece from having to raise money in the market until 2012? And isn’t their fiscal consolidation program “ahead of the plan”? Seems that is not…

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