"If you're going to panic, do it fast and beat the crowd." ~ Jesse Livermore

Wednesday, November 9, 2011

Italy Nears Tipping Point as Bond Yields Climb

Italy Nears Tipping Point as Bond Yields Climb - WSJ.com: "With Italian bond yields surging higher, analysts said Italy is at the brink of being unable to afford to borrow in the public markets.Less than two weeks after European leaders unveiled an agreement that was designed to bolster confidence in the region, the yield on Italy's 10-year debt drew close to the 7% mark, a line in the sand of both practical and psychological importance to the market. Psychologically, 7% has become a beacon due to the fact that Greece, Portugal and Ireland each sought bailouts soon after their debt reached these levels. While analysts said it is too simplistic to say that Italy will be forced to ask for support if its 10-year debt yields 7%, they said the recent selloff is taking the country to the tipping point. "I don't know if 7% is the upper limit, or if it's 6.9% or 7.25%, but I do know [Italy] can't go on for very long having these kinds of bond yields," said Gabriel Stein, director at Lombard Street Research in London."

Silvio Berlusconi leaves behind an Italy deep in financial crisis
Globe and Mail
But Italy has a long, tough road ahead, regardless of who leads the country through its fiscal crisis. "The hope will be that Italy can quickly gain a new government with the stomach and the ability to implement major structural reforms," said Ben May ...
UniCredit's $10 Billion Fundraising Jeapordized as Contagion Strikes Italy
Bloomberg
UniCredit is preparing to embark on the biggest Italian stock sale in more than two years to comply with regulators' deadline to bolster capital by June. UniCredit is preparing to embark on the biggest Italian stock sale in more than two years to ...
Decades Later, Student Loan Default Still Haunts Borrower
DailyFinance
But there are millions more borrowers who are already in default on federal loans and who won't qualify for the plan. At the end of fiscal 2008, more than $39 billion in federal student loans were indefault. Among borrowers who started repaying their ...
Default probabilities for Belgium & Portugal drop: Albano
Reuters Video
Nov. 8 - Kamakura default probabilities for Belgium and Portugal dropped below their moving average, pointing to an improved outlook, says Vincenzo Albano, Reuters fixed income analyst.
Corporate Bond Risk Falls in Europe, Credit-Default Swaps Show
BusinessWeek
8 (Bloomberg) -- The cost of insuring against default on European corporate and sovereign debt fell, according to traders of credit-default swaps. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings ...
Financial crisis may delay CAP reform, warns MEP
FarmersWeekly
Plans to reform the Common Agricultural Policy should not be agreed until the European Union has found its way out of its financial crisis and approved its next round of budgets, MEPs have claimed. Speaking at a debate on shaping EU farm policy and ...
If default swaps will not pay for the haircut, who will?
Fundweb
Most CDSs are still traded over the counter, rather than via an exchange, pending global reforms agreed since the financial crisis. Information about exposure to CDS contracts by providers of such products is hard to come by, and the little data ...
The financial crisis in Europe will empty Algerians' pockets
Ennahar
Algiers-economic experts warn against the consequences of the financial crisis in Europe on Algeria and its impact on commodity prices over the three coming years, especially as Algeria depends on import of these products. According to the Algerian ...
Fitch Affirms Metrofinanciera at 'CCC' and 'CCC(mex)'
MarketWatch (press release)
Metrofinanciera still has 45% of its total assets in the land properties that triggered Metrofinanciera'sdefault in 2009 and only a small fraction of those are productive. In addition, roughly 85% of its construction loans (which account for 29% of ...
Harrisburg in default
Marketplace
Harrisburg, the state capital, is in default. It owes bondholders and creditors more than $300 million. That's six times the city's annual budget. How it got there is a convoluted tale of bad bets that the city's 48000 residents are paying off. ...
Update: BOC Carney: Euro Zone Risks Persist; No Contagion Yet
MNI News
LONDON (MNI) - There are clear downside risks from the euro zone crisis but the feared financial contagion has yet to materialize, Bank of Canada Governor and newly appointed head of the Financial Stability Board, Mark Carney, said here. ...
AIG Shows Why World's Current Predicament is a Financial Crisis
International Business Times
AIG sold credit protection, or credit insurance, in the form of credit default swaps on collateralized debt obligations. Credit default swaps are insurance on debt that can be traded. Insure the correct assets and an insurance company like AIG can make ...
Commonwealth Bank Warns Over Contagion of Debt Crisis
Which Way To Pay - Australia
David Turner, the chairman of the Commonwealth Bank, today voiced his concerns over the potential detrimental effects of the eurozone debt crisis on the global economy, and that Australia is far from 'immune' from the problems in Europe. ...
NHB to set up Rs 1200-cr default guarantee fund for urban poor
Business Standard
The scheme, which is awaiting Cabinet approval, will be a default guarantee scheme whereby banks and financial institutions, who fund houses to the urban poor up to Rs 5 lakh and area of 430 square ft. However, the lender can only avail of this ...
China Has Defenses Against Europe Contagion, Moody's Byrne Says
BusinessWeek
8 (Bloomberg) -- China has defenses to cope with any contagion from the euro area's debt crisis, including a high savings rate, a current account surplus and a central government that is spending within its means, Thomas Byrne, a senior vice president ...
S&P cuts eircom's rating, warns of default risk
Reuters
"In our view, there is a clear risk of a capital restructuring over the next few months -- which would be tantamount to a default under our criteria -- as possible remedies could aim to address the long-term sustainability of the capital structure," ...

Contagion from debt, property worry analysts
BusinessLIVE
Any prolonged recession combined with weakness in the property market would significantly affect SA and through that channel the contamination would be a concern for the sovereign rating, according to ratings agency S&P. MD of S&P in SA Konrad Reuss ...
Pranab to meet Mamata on financial crisis
Zee News
Kolkata: Days after West Bengal Chief Minister Mamata Banerjee asked the Centre to treat the state "differently" and sought a debt restructuring plan, Union Finance Minister Pranab Mukherjee is likely to hold a meeting with her on Tuesday, ...
Weekly Strategy - Selling EUR/USD On Italian Debt Contagion
Action Forex
On Tuesday, the Greek unity government will announce the new prime minister and cabinet, so there may be some final upside on short-term euphoria that a disorderly Greek default will be avoided. We think the European debt crisis is far from over, ...
Goff: Obama is a good leader, Key is not
3News NZ
The United States' unemployment has also doubled since before the global financial crisis and they have received a credit downgrade too. Mr Goff told Firstline this morning that President Obama and Mr Key are incomparable because they inherited ...
Crowdsourced credit crisis cross-check « Blunt Object
By bluntobject
Andrew Sullivan culls some insights on the credit crisis — specifically, the roles of investors, ratings agencies, and mortgage originators — from reader emails: Dish Check update: Who caused the financial collapse? Go forth and read. ...
Blunt Object
Too Big To Fail Casino Banks Make $518 Billion Bet On PIIGS ...
By Problem Bank List Staff
The Too Big To Fail Banks are at it again, making huge speculative bets on the odds of sovereign default by Portugal, Italy, Ireland, Greece and Spain. The.
Problem Bank List
XE.com - S&P cuts eircom's rating, warns of default risk
Ratings agency Standard & Poors (S&P) downgraded the parent company of eircom, Ireland's largest phone company, three notches to CC on Tuesday and warned the group was in risk of defaulting on its debts.
XE Forex News
(Update) The Fire Next Time: The Euro Financial Crisis - Italian ...
By AZ BlueMeanie
Posted by AzBlueMeanie: This melodrama is starting to sound like an episode of Rocky and Bullwinkle: "Last week our heroes teetered on the edge of a no confidence vote and clung to a referendum on the European bailout for Greece......
Blog For Arizona
Financial crisis: Punishment Europe | Comment is free | The Guardian
When the Serbian dinar depreciated as a result of the global financial crisis, ... Subprime mortgages are mortgages lent to people, who are likely to default. ...
www.guardian.co.uk/.../07/financial-crisis-punishment-europe
EUR/USD after Greek Default?
What will be the currency rate movement, in the case of a disorderly Greek default? The vast majority of both private and professional investors are really ...
www.fxstreet.com/fundamental/analysis-reports/view.../07/
(MFG) Client Home
By seeking Court approval on an emergency basis, the Trustee, in coordination with the CFTC, SIPC, and the CME and other exchanges, has been able to ...
dm.epiq11.com/mfglobal/default.aspx

Italian Fiscal Crisis: a Golden Opportunity?
Barron's
As bond investors demand ever-higher yields to compensate for the risk of Italian government securities, those higher interest costs raise the budget deficit and deepen the fiscal crisis. How -- and whether -- Italy can break this feedback loop has ...
Debt and Default: Are More Financial Dominoes About to Fall?
Elliott Wave
Debtors begin to default. When that happens, the game is up." Just how close are we to "game up"? Well, the latest Financial Forecast states: "While Europe is the epicenter of the credit crisis, the situation in the US is hurtling toward the same type ...
PMI Won't Default If Unit Returns to Company, CEO Smith Says
BusinessWeek
8 (Bloomberg) -- PMI Group Inc., the mortgage insurer whose main unit was seized by regulators last month, won't default on more than $700 million in bonds if a judge puts PMI back in charge, Chief Executive Officer L. Stephen Smith said. ...
David Holt Appointed SVP Default Strategy and Execution for ServiceLink
MarketWatch (press release)
8, 2011 /PRNewswire via COMTEX/ -- ServiceLink, a leading end-to-end origination and default solutions provider for fifteen of the top twenty mortgage lenders and servicers, is pleased to announce that David Holt has joined ServiceLink as Senior Vice ...
Did Bonuses Really Cause the Financial Crisis?
CNBC.com
The problem with this simple thesis is that it runs contrary to the behavior of actual banking executives at the firms that failed in the financial crisis. The CEOs of Bear Stearns and Lehman Brothers, for example, each lost more than $1 billion when ...

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