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  • Bank of America under pressure

    Alexander Gloy

    Will Bank of America (BAC) get into difficulties because of a) legal problems to foreclose on delinquent homeowners and b) being forced to repurchase soured mortgage-backed securities? A mortgage is a publicly registered lien on the house. The attached mortgage note is a debt instrument that can be, like a check, endorsed to others. This…

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  • Gold takes a breather – US Mint to sell some Eagles

    Alexander Gloy

    First serious setback in the gold price since quite some time (from a record-high $1,363 per ounce to $1,333 within a few hours): Gold price ($/oz) intraday 2010-10-07. Souce: DailyFX.com Coincidently, AngloGold Ashanti announced it has completed the unwinding of its hedge book (gold mining companies used to sell gold forward at fixed prices to…

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  • Chinese PM Wen bathes in 290 tonnes of olive oil while buying Greek bonds

    Alexander Gloy

    My favorite pinata (http://www.youtube.com/watch?v=wi3semJPQzk), Greece, has received some help from China. On a visit to Greece (first by a Chinese Prime Minister in 24 years), Wen said China had bought some Greek government bonds and would do so again in the future. This has helped bring down 10-year Greek government bond yields below 10% for…

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  • Ireland might be downgraded again; Euro strength hurts

    Alexander Gloy

    Moody’s warned it may cut Ireland’s credit rating again as the country has to foot a huge bill from bailing out its banks. For now, the recent rise in Irish government bond yields seems to have been halted: 10 year Irish government bond yield. Source: Bloomberg.com As the house of cards (Euro zone) is wobbling…

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  • In God we trust

    Alexander Gloy

    Sometimes I get accused of having “religious beliefs” in gold. Why is gold so valuable – because it’s rare, and expensive to extract from earth (ca $450 per ounce). However, it is impossible to calculate a “fair” price. I am the first one to admit that gold has no earnings, no dividend yield. You might…

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  • Ireland’s bank bail-out cost reaches EUR 50bn; bond sales suspended

    Alexander Gloy

    Irish Prime Minister Brian Cowen just announced the government decided to cancel all bond auctions for the rest of the year because of “market turbulence”. The 10yr yield, after having reached a record 6.8% in recent days, retreated to 6.57%. Irish 10 year government bond yield. Source: Bloomberg.com On Thursday, Finance Minister Brian Lenihan revealed…

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  • Ireland’s solvency now ranked between Pakistan and Ukraine

    Alexander Gloy

    Ireland is now right between Ukraine and Pakistan when it comes to likelihood of default (which, over the next 5 years, is at 35%). This after Irish GDP fell 1.2% in Q2 (vs +0.5% expected) and Q1 growth rate was revised down to 2.2% (from 2.7%). GNP (gross national product) fell 4.1% (-2.7% expected). Irish…

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  • Former German FinMin says Greece will default

    Alexander Gloy

    From an interview (9/14/2010) with German magazine “Der Spiegel” former German Finance Minister Peer Steinbrueck (2005-2009): SPIEGEL: In the end, the euro-zone countries approved a bailout package that required Athens to impose a drastic austerity program and that includes loans worth €110 billion. Are the measures sufficient? Steinbrück: Just look at the numbers. Despite the…

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