Irish Relief Fleeting as `Day of Reckoning' Nears
By Paul Dobson - Nov 26, 2010 10:29 AM ET
Borrowing costs for Europe’s most indebted nations are at record highs as Ireland’s capitulation in accepting a bailout of its banking industry stokes concern that other countries also will have to seek aid.
The average yield for 10-year debt from Greece, Ireland, Portugal, Spain and Italy reached 7.57 percent today, a euro- era record. The average premium investors demand to hold those securities instead of German bunds widened to as much as 492 basis points, the highest level of 2010. The average cost of insuring against default by the five nations using credit- default swaps reached a record 517 basis points on Nov. 23.
“It’s no longer taboo to speak about a restructuring,” said Johannes Jooste, a portfolio strategist at Bank of America Corp.’s Merrill Lynch Global Wealth Management in London, which oversees about $1.4 trillion for clients. “The fact that bond yields continue to rise and put pressure on countries that have to fund from the market makes investors less and less confident, and it’s bringing forward the day of reckoning.”
http://www.bloomberg.com/news/2010-11-26/ireland-s-relief-proves-fleeting-as-day-of-reckoning-nears-euro-credit.html
Friday, November 26, 2010
Euro zone's sovereign debt crisis escalates
Euro zone's sovereign debt crisis escalates
Europe Acts to Contain Debt Crisis
Reassurances Fail to Stem Fears That Woes Will Infect Portugal and Spain; EU-IMF Aim to Wrap Up Irish Aid Package
BERLIN—The euro zone's sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors' fears.
Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety surrounding the country's fiscal position Friday, saying there was "absolutely" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union. But his attempt to calm the markets had little effect, with the euro tumbling and the selloff in Spanish and Portuguese sovereign bonds continuing.
Europeans Clash on Bailout Zapatero Rules Out Rescue for Spain Ireland's Austerity Fails to Ease Fears Heard: Belgium Is the One to Watch How a Lack of Market Confidence Spreads The Source: The Euro is Totally Fine. Honest. Complete Coverage: Euro Zone Crisis Sovereign Debt Watch "If we continue to see the recent trend in Spanish bond yields then the crisis is going to be taken to a completely new level, as Spain accounts for approximately 11.7% of euro-zone [gross domestic product] which is pretty much double the figure of Ireland, Portugal and Greece [combined]," said Gary Jenkins, head of fixed-income research at Evolution Securities.
MORE: http://online.wsj.com/article/SB10001424052748704693104575638132375883318.html?mod=WSJ_hp_LEFTTopStories
Europe Acts to Contain Debt Crisis
Reassurances Fail to Stem Fears That Woes Will Infect Portugal and Spain; EU-IMF Aim to Wrap Up Irish Aid Package
BERLIN—The euro zone's sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors' fears.
Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to dispel the growing anxiety surrounding the country's fiscal position Friday, saying there was "absolutely" no chance the euro zone's fourth-largest economy would seek a bailout from the European Union. But his attempt to calm the markets had little effect, with the euro tumbling and the selloff in Spanish and Portuguese sovereign bonds continuing.
Europeans Clash on Bailout Zapatero Rules Out Rescue for Spain Ireland's Austerity Fails to Ease Fears Heard: Belgium Is the One to Watch How a Lack of Market Confidence Spreads The Source: The Euro is Totally Fine. Honest. Complete Coverage: Euro Zone Crisis Sovereign Debt Watch "If we continue to see the recent trend in Spanish bond yields then the crisis is going to be taken to a completely new level, as Spain accounts for approximately 11.7% of euro-zone [gross domestic product] which is pretty much double the figure of Ireland, Portugal and Greece [combined]," said Gary Jenkins, head of fixed-income research at Evolution Securities.
MORE: http://online.wsj.com/article/SB10001424052748704693104575638132375883318.html?mod=WSJ_hp_LEFTTopStories
Sunday, November 21, 2010
Ireland to Seek EU-Led Bailout as Lenihan Works to Avert Bank `Collapse'
Ireland to Seek EU-Led Bailout as Lenihan Works to Avert Bank `Collapse'
By Joe Brennan and Stephanie Bodoni - Nov 21, 2010 10:54 AM ET
Finance Minister Brian Lenihan said Ireland will apply for a bailout as it sets itself up to be the second euro member to seek a rescue from the European Union and the International Monetary Fund.
“I will be proposing to my colleagues that they should formally apply for a program,” Lenihan said in an interview with state broadcaster RTE in Dublin. “The banks were too big a problem for the country. The key issue all the time for the government is to ensure that we do not have a collapse of the banking sector.”
Prime Minister Brian Cowen chairs a cabinet meeting today, and Lenihan wouldn’t say how much Ireland needs, only that it will “certainly not” amount to 100 billion euros ($137 billion). European finance ministers will meet via teleconference starting at 5 p.m. Dublin time to discuss the procedures to be followed once the formal aid request is made, said an EU official with direct knowledge of the talks.
MORE: http://www.bloomberg.com/news/2010-11-21/lenihan-says-he-will-recommend-ireland-should-formally-ask-for-eu-bailout.html
By Joe Brennan and Stephanie Bodoni - Nov 21, 2010 10:54 AM ET
Finance Minister Brian Lenihan said Ireland will apply for a bailout as it sets itself up to be the second euro member to seek a rescue from the European Union and the International Monetary Fund.
“I will be proposing to my colleagues that they should formally apply for a program,” Lenihan said in an interview with state broadcaster RTE in Dublin. “The banks were too big a problem for the country. The key issue all the time for the government is to ensure that we do not have a collapse of the banking sector.”
Prime Minister Brian Cowen chairs a cabinet meeting today, and Lenihan wouldn’t say how much Ireland needs, only that it will “certainly not” amount to 100 billion euros ($137 billion). European finance ministers will meet via teleconference starting at 5 p.m. Dublin time to discuss the procedures to be followed once the formal aid request is made, said an EU official with direct knowledge of the talks.
MORE: http://www.bloomberg.com/news/2010-11-21/lenihan-says-he-will-recommend-ireland-should-formally-ask-for-eu-bailout.html
Tuesday, November 16, 2010
Euro under siege as now Portugal hits panic button
Euro under siege as now Portugal hits panic button
By Bruno Waterfield and Robert Winnett, The Daily Telegraph
Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTqDLrZ
The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a "high risk" of requiring an international bail-out.
Portugal became the latest European nation to admit it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.
Greece also disclosed that its economic problems are even worse than previously thought.
Angela Merkel, the German Chancellor, raised the spectre of the euro collapsing as she warned: "If the euro fails, then Europe fails."
European finance ministers will meet in Brussels on Tuesday to begin discussions over a new European stability plan that is expected to result in billions of pounds being offered to Ireland, Portugal and possibly even Spain.
Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTWcnlK
By Bruno Waterfield and Robert Winnett, The Daily Telegraph
Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTqDLrZ
The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a "high risk" of requiring an international bail-out.
Portugal became the latest European nation to admit it was on the brink of seeking help from Brussels after Ireland confirmed it had begun preliminary talks over its debt problems.
Greece also disclosed that its economic problems are even worse than previously thought.
Angela Merkel, the German Chancellor, raised the spectre of the euro collapsing as she warned: "If the euro fails, then Europe fails."
European finance ministers will meet in Brussels on Tuesday to begin discussions over a new European stability plan that is expected to result in billions of pounds being offered to Ireland, Portugal and possibly even Spain.
Read more: http://www.montrealgazette.com/business/Euro+under+siege+Portugal+hits+panic+button/3831814/story.html#ixzz15RTWcnlK
Monday, November 15, 2010
The Empire State Manufacturing Survey index fell below "zero" first time since July 2009
The Empire State Manufacturing Survey index fell below "zero" first time since July 2009
New York state manufacturing unexpectedly plunged in November, the first contraction since July 2009 when the US economy exited recession, official data showed Monday.
The Federal Reserve Bank of New York reported its manufacturing activity index dropped to minus 11.1 points in November, from a positive 15.7 points in the previous month.
The Empire State Manufacturing Survey index is considered a bellwether of the manufacturing sector which has been a key strength in the economic recovery.
It was the first time the index fell below zero since July 2009, the month after the worst recession in decades was officially declared over.
more:
http://sg.finance.yahoo.com/news/New-York-state-manufacturing-afpsg-2922799344.html?x=0
New York state manufacturing unexpectedly plunged in November, the first contraction since July 2009 when the US economy exited recession, official data showed Monday.
The Federal Reserve Bank of New York reported its manufacturing activity index dropped to minus 11.1 points in November, from a positive 15.7 points in the previous month.
The Empire State Manufacturing Survey index is considered a bellwether of the manufacturing sector which has been a key strength in the economic recovery.
It was the first time the index fell below zero since July 2009, the month after the worst recession in decades was officially declared over.
more:
http://sg.finance.yahoo.com/news/New-York-state-manufacturing-afpsg-2922799344.html?x=0
Saturday, November 06, 2010
Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Former CEO of Nation's 10th Largest Bank
Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Former CEO of Nation's 10th Largest Bank
Thursday, November 04, 2010
By Terence P. Jeffrey
http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica
(CNSNews.com) - John Allison, who for two decades served as chairman and CEO of BB&T, the nation's 10th largest bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction.
Allison likened what he sees as the predictable future bankruptcy of the United States to the problems at Fannie Mae and Freddie Mac, whose insolvency he also said was foreseeable to those who studied their business practices and financial situation.
“I think the first thing we have to realize is where we’re going and to face it objectively,” Allison told CNSNews.com, when asked about the trillion-dollar-plus deficits the federal government has run for three straight years, the more than $13 trillion in federal debt, and the $61.9 trillion long-term shortfall the government faces (according to the analysis of the Peter G. Peterson Foundation) if the government is to pay all the benefits it has promised through entitlement programs.
“If you run the numbers, on all those numbers that you just talked about, which I think are accurate, very accurate, in 20 or 25 years, the United States goes bankrupt,” said Allison. “It’s a mathematical certainty.
“It reminds me very much of that story I told you about Freddie Mac and Fannie Mae,” said Allison. “We were running the numbers, and Freddie Mac and Fannie Mae went bankrupt, and we got there. In 20 or 25 years, the United States goes bankrupt.
http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica
Thursday, November 04, 2010
By Terence P. Jeffrey
http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica
(CNSNews.com) - John Allison, who for two decades served as chairman and CEO of BB&T, the nation's 10th largest bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction.
Allison likened what he sees as the predictable future bankruptcy of the United States to the problems at Fannie Mae and Freddie Mac, whose insolvency he also said was foreseeable to those who studied their business practices and financial situation.
“I think the first thing we have to realize is where we’re going and to face it objectively,” Allison told CNSNews.com, when asked about the trillion-dollar-plus deficits the federal government has run for three straight years, the more than $13 trillion in federal debt, and the $61.9 trillion long-term shortfall the government faces (according to the analysis of the Peter G. Peterson Foundation) if the government is to pay all the benefits it has promised through entitlement programs.
“If you run the numbers, on all those numbers that you just talked about, which I think are accurate, very accurate, in 20 or 25 years, the United States goes bankrupt,” said Allison. “It’s a mathematical certainty.
“It reminds me very much of that story I told you about Freddie Mac and Fannie Mae,” said Allison. “We were running the numbers, and Freddie Mac and Fannie Mae went bankrupt, and we got there. In 20 or 25 years, the United States goes bankrupt.
http://www.cnsnews.com/news/article/former-bbt-ceo-bankruptcy-us-mathematica
Friday, November 05, 2010
Backlash against Fed’s $600bn easing
Backlash against Fed’s $600bn easing
By Alan Beattie in Washington, Kevin Brown in Singapore and Jennifer Hughes in London
http://www.ft.com/cms/s/0/981ca8f4-e83e-11df-8995-00144feab49a.html#axzz14PCgOWTZ
Published: November 4 2010 18:43 | Last updated: November 4 2010 18:43
The US Federal Reserve’s decision to pump an extra $600bn into the economy has galvanized emerging market central banks into preparing defensive measures and sparked criticism from leading global economies.
The Fed’s initiative, in response to rising concern about the weakness of the US economy, has fuelled fears of a sharp drop in the dollar and a fresh flood of capital inflows into emerging markets.
Brazil and Germany on Thursday criticised the Fed’s action a day earlier, and a string of east Asian central banks said they were preparing measures to defend their economies against large capital inflows.
Guido Mantega, the Brazilian finance minister who was the first to warn of a “currency war”, said: “Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter.”
Mr Mantega added: “You have to combine that with fiscal policy. You have to stimulate consumption.” Germany also expressed concern.
An adviser to the Chinese central bank called unbridled printing of dollars the biggest risk to the global economy and said China should use currency policy and capital controls to cushion itself from external shocks.
more:
http://www.ft.com/cms/s/0/981ca8f4-e83e-11df-8995-00144feab49a.html#axzz14PCgOWTZ
By Alan Beattie in Washington, Kevin Brown in Singapore and Jennifer Hughes in London
http://www.ft.com/cms/s/0/981ca8f4-e83e-11df-8995-00144feab49a.html#axzz14PCgOWTZ
Published: November 4 2010 18:43 | Last updated: November 4 2010 18:43
The US Federal Reserve’s decision to pump an extra $600bn into the economy has galvanized emerging market central banks into preparing defensive measures and sparked criticism from leading global economies.
The Fed’s initiative, in response to rising concern about the weakness of the US economy, has fuelled fears of a sharp drop in the dollar and a fresh flood of capital inflows into emerging markets.
Brazil and Germany on Thursday criticised the Fed’s action a day earlier, and a string of east Asian central banks said they were preparing measures to defend their economies against large capital inflows.
Guido Mantega, the Brazilian finance minister who was the first to warn of a “currency war”, said: “Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter.”
Mr Mantega added: “You have to combine that with fiscal policy. You have to stimulate consumption.” Germany also expressed concern.
An adviser to the Chinese central bank called unbridled printing of dollars the biggest risk to the global economy and said China should use currency policy and capital controls to cushion itself from external shocks.
more:
http://www.ft.com/cms/s/0/981ca8f4-e83e-11df-8995-00144feab49a.html#axzz14PCgOWTZ
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