CYPRUS, TROIKA AGREE TO BAIL-IN, BANK OF CYPRUS TO SEE 40% HAIRCUTS FOR DEPOSITS OVER €100,000, DEPOSITS AT OTHER BANKS WILL BE WIPED OUT!
*Updated: In response, a bomb has just been detonated at the Limassol branch of the Bank of Cyprus
Multiple breaking reports indicate that in an early Monday meeting with Lagarde, Draghi, & Von Rompuy, Cyprus’ President Anastasiades has agreed to a Cypriot bank restructuring/ depositor haircut deal in [...]
By Mike “Mish” Shedlock
Magicians at the ECB have temporarily convinced market participants that Europe is in some sort of recovery. It isn’t.
All of Europe is now in recession, including Germany as noted earlier today in German Economy Shrinks Most in Three Years; Situation Significantly Worse Than Mood.
“Debt Doom Loop in Spain”
Bloomberg reports Draghi’s Bond Rally Masks Trapping Spain Debt Doom Loop.
The bond rally has sent Spanish borrowing That costs to 10-month lows has [...]
S&P futures are trading down around 18 points in the pre-day-session market. This would be thelargest gap-down day in three months, and only the third largest gap-down open in 2012. The market has broken to its lowest since QEtc was announced and retraced more than half of the Draghi ‘Believe’ moment spike…
The lower paneil is the distance from previous close to current open…
John Taylor, founder and CEO of the world’s largest currency hedge fund FX Concepts, spoke with Bloomberg Television’s Erik Schatzker and Stephanie Ruhle on “Market Makers” today and said that he’ll “probably always be a bear on the euro” and that “it is hard to look at the European situation and see a cloudy sky become clear.”
Taylor also said that “they equity market is not showing any legs…I do not [...]
by Phoenix Capital Research
Regarding the recent Central Bank coordinated intervention, the key take-away point is that the ECB and US Federal Reserve attempted “shock and awe” tactics with their latest announcements by throwing out words such as “unlimited” and “open-ended.”
The implication here was that the Central Banks would do everything they could to prop up the financial markets. However, as has been the case with every Central Bank intervention, there are unintended consequences.
Markit’s Purchasing Managers’ Index (PMI) dropped from 46.3 to 45.9 in August, well below the 50 level that marks growth. The European Commission’s confidence index sank to 25.9, it’s lowest level for 40 months.
The data showed the further development of a “two-speed” economy in the eurozone. Markit said Germany’s private sector rose to 49.7 in September, from 47 in August – a five-month high. But in France activity sank to [...]
From Zero Hedge:
Last week, we discussed what the expectations were for Draghi’s OMT — approximately EUR250bn — which coincidentally provided cover for the rest of the year (conditionally) for the entire new issuance of the European Union.
Based on EURUSD’s recent exuberance — something we saw ahead of QE1 and QE2 — the market is now more than primed for some serious USD debasement. The current EURUSD of 1.2850 implies a [...]
‘Big Day’ For Stock Market: Dow Closes At Highest Since 2007
The Dow closed at its highest since 2007…
Hussman: We Are at the Mouth of a Vortex
… “There are few times in history when the S&P 500 has been within 1% or less of its upper Bollinger band (two standard deviations above the 20-period moving average) on daily, weekly, and monthly resolutions;
coupled with a Shiller P/E in excess of 18 — [...]
Last week we discussed what the expectations were for Draghi’s OMT – approximately EUR250bn – which coincidentally provided cover for the rest of the year (conditionally) for the entire new issuance of the European Union. Based on EURUSD’s recent exuberance – something we saw ahead of QE1 and QE2 – the market is now more than primed for some serious USD debasement. The current EURUSD of 1.2850 implies a Fed-to-ECB [...]
There has been a lot of concern regarding the potential “unlimited” nature of the ECB’s new bond market intervention plan.
The worry is that the ECB could end up with a balance sheet packed with sovereign debt that no one else wants as everyone rushes to sell to the ECB once the central bank starts buying.
Barclays, like many other research shops, told clients in a note that the details of the ECB’s new bond-buying plan were [...]
One of the big selling points by Draghi and those favoring the ECB bond buying program, to assuage investor fears of its inflationary impact, was that the purchases would be offset or sterilized so as to provide for “price stability”. I suspect that this was emphasized to deal with the strong German opposition to the plan as the German experience with hyperinflation during the Weimar republic has deep roots in the German [...]
@ 4:20 in-a brief few minutes attempt to get below the surface of the actual words & perception of today’s Draghi statement
From King World News:
Today, Rick Rule spoke with King World News about spectacular home runs some investors have been hitting in the gold, silver, and crude oil markets. Rule, who is now part of Sprott Asset Management, also predicted, “… gold and silver prices will trade higher in the six to 12 month time frame.”
But first, here is what Rule had to say regarding QE and the inflation/deflation debate: “A [...]
Not entirely surprising following the outlook changes for Germany, France, UK, and Holland but still an intriguing move right before Draghi’s big unveiling: Moodys maintains AAA rating but shifts to outlook negative.
“Moody’s believes that it is reasonable to assume that the EU’s creditworthiness should move in line with the creditworthiness of its strongest key member statesconsidering the significant linkages between member states and the EU, and the likelihood that the large Aaa-rated [...]
(Reuters) – Spain saw close to a 40 percent rise in capital outflow in June, Bank of Spain data showed on Friday, as investor confidence in a country struggling to balance its public accounts eroded further.
Spain capital outflows rise nearly 40 percent in June
Moody’s to continue Spain review to end of Sept.
Spain loses bank support
France, Spain urge action to curb market rates
Japan to meet fiscal 2015 deficit targets, longer-term goals [...]
From Zero Hedge:
The market over the summer has been quieter than we had expected – thanks to Draghi’s placating words and Bernanke’s promises. Equities rallied, Bonds and Treasurys sold off, and government spreads in Europe declined. All these markets look more constructive.
However, the event calendar in the near future is very heavy, notably the political one. This article from UBS’ global strategy group does three things. First, they provide a [...]
by Phoenix Capital Research
Swing by www.gainspainscapital.com for more market commentary, investment strategies, and several FREE reports devoted to help you navigate the coming economic and capital market changes safely.
Mr Draghi… a few questions for you…
You say that whatever measure you take… it will be “enough” to support the Euro. Seeing as you’ve already spent over €1 trillion via your LTRO 1 and LTRO 2 schemes only to find that:
The uptick in EU banks [...]
London Gold Market Report
from Ben Traynor
Wednesday 29 August 2012, 06:45 EDT
Bernanke Disappointment “Could See Gold Correct”, ECB “May Need to Take Exceptional Measures” says Draghi
WHOLESALE gold prices dipped below $1665 an ounce during Wednesday morning’s London trading, slightly below where they started the week, while stock markets also edged lower, with markets focused on upcoming meetings of central bankers in the US and Europe.
Silver prices fell to $30.76 an ounce – in [...]
by GoldCore Gold Bullion
History May View ECB’s Draghi As “Currency Forger Of Europe”
Today the London Bullion Market is closed for a national holiday.
Friday’s AM fix was USD 1,666.50, EUR 1,329.16 and GBP 1,051.88 per ounce.
Silver is trading at $30.91/oz, €24.77/oz and £19.62/oz. Platinum is trading at $1,550.00/oz, palladium at $647.90/oz and rhodium at $1,025/oz.
Gold climbed $0.80 or 0.05% in New York on Friday and closed at $1,669.80. Silver surged to [...]
Draghi sent the strongest signal to date that the ECB was willing to use its power to print money to preserve the euro.”
With everyone confused over why Draghi has put himself in a position from which he can’t deliver and satisfy the market one hour ahead of the ECB announcement, and everyone placing their last bets on the EUR and the SPGBs before the ECB press release hits without really having any clue what the Italian has in store that will make both the EuroStoxx and the Bundesbank happy, here are some [...]
It seems German lawmakers reject a banking license for ESM to access ECB; even if funds buy bonds, will be limited by capacity EFSF <€200bn
Showdown Is Imminent Between The Germans And Draghi
European Central Bank President Mario Draghi hinted to investors last week that the ECB would take action in short order to prevent Spanish and Italian borrowing costs from soaring out of control.
He promised to “do whatever it takes to save [...]
It would be odd to suggest that one of the most scathing critiques of the ECB’s attempts to talk up the market on nothing but hope, promises and expectations would come from rating agency Moody’s, yet that is precisely what has happened. With Swiss, Dutch, Finnish, and German short-dated bonds once again hitting new record low (negative) rates (and Italian 10Y is weakening), it would appear that at least some of [...]