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

Tuesday, July 10, 2012

Spanish and Italian yields spiralling out of control

Debt crisis: ECB pledges action as southern Europe buckles - Telegraph: "Yields on Spanish 10-year bonds punched through the danger line of 7pc yesterday, obliterating the short-lived gains from the European Union summit last month. Italian yields rose above 6.08pc. With a cruel twist, German rates for six-month money fell to a record low of minus 0.03pc on safe-haven flows, while France’s borrowing costs turned negative for the first time in French history. Spanish and Italian leaders pleaded for ECB intervention to stop yields spiralling out of control. . . . Andrew Roberts, credit chief at RBS, said the whole system was close to falling apart. “The reality is sinking in that there is no big bazooka to solve this crisis. The Germans, Dutch, and Finns were ambushed at the summit and are now saying they didn’t agree to do all these things once they got home,” he said. “Nothing has changed. We are no closer to fiscal union, and the banking union is ludicrous. We are getting very close to the end-game but nobody wants their fingerprints on the dagger,” he added. . . ." 

HIGHLIGHTS-Euro zone finance ministers' meeting
Reuters
BRUSSELS, July 9 (Reuters) - Euro zone finance ministerswill try to flesh out plans to reinforce the single currency,but their talks in Brussels may do little more than highlightthe limitations of last.

Analysis: Euro zone fragmenting faster than EU can act
Chicago Tribune
PARIS (Reuters) - Signs are growing that Europe's economic and monetary union may be fragmenting faster than policymakers can repair it. Euro zone leaders agreed in principle on June 29 to.

Euro Crisis Cannot Be Solved With Loans, De Jager Says
Businessweek
Lending money to euro-region countries such as Spain and Italy that are struggling to cut their budget deficits won't solve their fiscal difficulties or save the euro, Dutch Finance Minister Jan Kees de Jager said.

Spain Set to Get Reprieve on Deficit
Wall Street Journal
Euro-zone finance ministers meeting here Monday were set to give Spain an extra year to bring its budget deficit back in line with the bloc's rules and agree on the terms of a big bailout for the country's banks.

Spain in focus as euro-zone ministers meet
MarketWatch
Efforts to help Spain overcome high borrowing costs amid doubts over the ability of the European Union to implement recently agreed measures aimed at easing such worries are in focus as finance ministers from the 17 nations that share the euro meet ...

Euro-Zone Banks Recapitalized by ESM Won't Need Sovereign Guarantee -EU ...
Wall Street Journal
Directly refuting several euro-zone government officials with direct knowledge of ongoing discussions, Simon O'Connor, the spokesman for European Commissioner for economics, Olli Rehn, said that once the European Stability Mechanism is able to directly ...

Spain to get longer to reach budget goal
Reuters
BRUSSELS (Reuters) - European ministers were set to grant Spain an extra year to reach its deficit targets in exchange for further budget savings but remained far from pinning down details of bank rescues.

Rising Borrowing Costs Put Pressure on European Finance Ministers
New York Times
Rising interest rates on the “sovereign debt of several euro zone member states is a concern for the financial stability of the euro zone,” Prime Minister Mario Monti of Italy said Sunday at a conference in France. The interest rate, or yield, on ...

Spain faces budget risks despite looser target: document
Reuters
BRUSSELS (Reuters) - Looser budget deficit targets for Spain may still prove difficult to reach, according to an EU document that demands the country be subjected to three-monthly checks, a move that will.

WSJ: European Stocks Slip On Elevated Spanish Bond Yields
Wall Street Journal
European stocks closed lower and Spanish borrowing costs jumped as investors awaited news from the latest meeting of euro-zone finance ministers. Spain's 10-year government bond yield crept above the 7% mark--a level deemed unsustainable in the ...

Spanish Yield Tops 7%, Stocks Slip
Wall Street Journal
Spanish and Italian bond yields lurched higher in thin trading Monday, as investors wary of a disappointing outcome at a meeting of euro-zone finance ministers later in the day continued to trim holdings of riskier debt.

Euro crisis: Another day, another flirtation with disaster
GlobalPost (blog)
Yields on both Spanish and Italian debt rose to dangerously high levels on Monday, as European finance ministers prepared to meet again to discuss Europe's ongoing debt crisis.

Banking Union: Perhaps Too Little, Too Late
New York Times
Euro zone leaders agreed in principle June 29 to establish a joint banking supervisor for the 17-nation common currency area, based on the European Central Bank, although most of the crucial details remain to be worked out. The proposal was a tentative ...

Spain borrowing rate hits bailout danger zone
Fox News
Representatives from the 17 countries that use the euro are to meet later on Monday to discuss the terms of a €100 billion ($124 billion) lifeline from other members of the 17-country eurozone for Spain's banking industry. The discussions are all the ...

Euro zone can help banks directly once supervisor set up
Reuters
BRUSSELS (Reuters) - Direct recapitalization of euro zone banks will not require sovereign guarantees as soon as the bloc has established a new banking supervisory body, the European Commission said on.

Spanish, Italian Bonds Sink Ahead Of Euro-Zone Finance Ministers' Meeting
Wall Street Journal
Details on the plan to inject money into Spain's beleaguered banking system are still sketchy, while Finland and the Netherlands have expressed their opposition to plans to allow the euro zone's permanent rescue fund to buy bonds issued by fiscally ...

Spain deal requires "bad bank," more capital: source
Reuters
Euro zone leaders have promised to help Spain's banks, left laden with bad debts when a property bubble burst four years ago, after it became clear that with one in four workers out of a job the country could not manage the crisis without some form of ...

Can Euro-zone Ministers Walk The Walk?
TheStreet.com
Today, we will see if EU leaders can walk the walk at the meeting of Euro-zone finance ministers at 15:00 GMT in Brussels. Today's meeting is intended to start putting into action the agreements made at the June summit. There has already been some ...

Eurozone under pressure as Spain struggles
AFP
By Bryan McManus (AFP) – 16 minutes ago. BRUSSELS — Spain was in the firing line on the markets again Monday as eurozone finance ministers met to follow up on "breakthrough" measures agreed at a summit last month to tackle the debt crisis. The first ...

AFP

GLOBAL MARKETS: Spain Government Bond Yield Soars; Stocks Slip
Wall Street Journal
In addition, market participants were skeptical that a meeting of euro-zone finance ministers will make significant progress on solving the region's debt crises. Spain's 10-year government bond yield rose above the key 7% mark--a level deemed ...

GLOBAL MARKETS: European Stocks Slip, Spanish Bond Yield Above 7%
Wall Street Journal
European stocks slipped Monday and peripheral bond yields were under pressure, with market participants skeptical that a meeting of euro-zone finance ministers will make significant progress on solving the region's debt crises and amid doubts about ...

EU ministers meet to solve Spain crisis
Huffington Post
Spain – the fourth-largest economy in the eurozone – has been struggling to keep a lid on its government deficit in the midst of a recession while trying to support its troubled banking industry weighed down by toxic loans and assets from a collapsed ...

Eurozone talks stuck on detail of bank rescue fund plan
The Guardian
Leaders in Brussels divided over how to interpret summit accord aimed at easing pressure on highly indebted states.

The Guardian

Spain may get extra year to meet targets
CNN
Eurozone finance ministers meeting in Brussels, Belgium, on Monday will discuss giving Spain an extra year to meet its deficit targets.

Tighter Control for Euro Banks
Wall Street Journal (blog)
Euro-zone finance officials are settling on a framework that would create a new agency reporting to the ECB to police the largest banks in the bloc.

Global stocks slip on worries about economic growth, Europe
Reuters
NEW YORK (Reuters) - Stocks on major world markets fell for a fourth day on Monday as investors fretted about disappointing economic data in Asia and parts of Europe, while EU finance ministers met again to grapple with the euro zone's debt crisis.

Euro falls to two-year low against dollar (again)
CNNMoney
Fears intensified as finance ministers from eurozone countries set off on a two-day meeting in Brussels to determine how money from the European Stability Mechanism can be used to bail out troubled banks in the euro area. Low expectations for the ...

Spain bows to 'bad bank' idea
CNN
Eurozone finance ministers gather in Brussels on Monday aiming to agree broad conditions for Spain to unlock up to €100bn of loans to recapitalise its banks, as well as addressing the fraught issue of how the risks are shared in the long term. After ...

The Eurozone: A Twenty Year Crisis? « naked capitalism
By Yves Smith
As markets quickly shrugged off the news including that of further central bank rate cuts. Spanish bond yields rose over 7%, as Mr. Market clearly wanted a resumption of bond buying or some other decisive action, rather than a mere reduction ...
naked capitalism

Marc Faber Blog: Value In Distressed Eurozone
By Admin
I see value in equities, regardless of whether the euro zone stays or is abandoned. - in Irish Times Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
Marc Faber Blog

Nations will be Nations: 'Euro zone fragmenting faster than EU can act'
By Arlen Williams
The leaders agreed that the euro zone's permanent bailout fund, the 500 billion euro ($620 billion) European Stability Mechanism, would be able to inject capital directly into banks on strict conditions once the joint supervisor is established.
GulagBound.com

WOLFGANG MUNCHAU: The Euro Crisis Won't Be Resolved For 20 ...
By Simone Foxman
The true reason June's summit was a "historic" meeting.
Money Game

Eurozone Reeling Again, as Commitments from EU Summit Rolled ...
By David Dayen
There was fairly unanimous agreement that the most recent EU summit did some good, if for no other reason than it offloaded some of the risk for bank.
Firedoglake

RealClearWorld - Eurozone Crisis Will Last 20 Years
By Wolfgang Munchau, Financial Times
If something is neither sustainable nor self-correcting, there are only two courses of action left. The first is to wait patiently until the situation breaks down. This is the strategy pursued by the European Council – and by alcoholics. The alternative ...
RealClearWorld

Eurozone bond market tension rises < Spanish news | Expatica Spain
Interest rates for Spain and Italy rose sharply on Monday, but borrowing conditions for benchmark Germany and also for France eased, marking new tensio...
Expatica - Spanish Local Headlines

The Coming Crisis: Eurozone finance chiefs meet again as Spanish ...
By Lynsey
Eurozone finance chiefs will meet later today in yet another bid to halt the financial crisis as Spanish bond yields moved above the critical seven per cent and the Euro hit a year low. The leaders will flesh out plans to reinforce the single ...
The Coming Crisis

Eurozone fragmenting faster than EU can act | ForexLive
By Pete Jackson
The rush to put first elements of the ESM in place by next year may come too late. An invisible financial wall, potentially as dangerous as the Iron.
ForexLive

Sober Look: Denmark to Eurozone: keep your darn euros out
By Walter Kurtz
Denmark's banks will be losing money on deposits they take in (unless they charge rather than pay interest), which should keep these banks from taking large amounts of DKK (converted from euros) from Eurozone depositors.
Sober Look

Some PIIGS are more equal… - Keep Talking Greece
By keeptalkinggreece
George Orwell was a prophet when he summarized in a single phrase the equality in the Animal Farm: "All animals are equal, but some animals are more equal.
Keep Talking Greece

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