Derivati USA: CME-CBOT-NYMEX-ICE BUND, TBOND and the middle of the guado (VM 69)
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feliceanima
Forumer attivo
Giomf, fernando ha scoreggiato ed ecco la reazioni degli indici .
Scusa Ferna poi quell'appartamento lo hai piu' comprato ti ricordi
Scusa Ferna poi quell'appartamento lo hai piu' comprato ti ricordi
gipa69
collegio dei patafisici
The decision took much longer than expected, but for once the scope of the actions unveiled dwarfed previous leaks and speculation: this is shock and awe part II and in 3-D, with a much bigger budget and a more impressive array of special effects: a total of EUR750bn in EU and IMF funds to support Eurozone member countries; direct government bond purchases and probably additional liquidity provisions by the ECB; and the reinstatement of FX swap lines between major central banks (Fed, ECB, Bank of Japan, Bank of Canada, Bank of England, Swiss National Bank), mainly to ensure sufficient supply of USD liquidity. The decision came at three in the morning in Brussels, after a weekend of intense discussions involving EU and key G20 officials, and a frantic consultation within the German cabinet to determine whether the measures might violate the country’s Constitution.
This truly is overwhelming force, and should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion. Not only is the headline number stunning, but the ECB’s decision to intervene in the secondary market should offset concerns about the time it will take to deploy the stabilization funds, and the reinstatement of the FX swap lines gives a signal of the global support backing Eurozone policymakers—as the Eurozone’s potential sovereign debt crisis had suddenly emerged as the single biggest threat to global financial stability.
The longer term consequences will take longer to assess and digest: if the stabilization fund needs to be drawn upon, this would involve the issuance of potentially hundreds of billion euros in additional eurozone debt; the ECB’s move will raise serious questions about its independence; and governments will have to gauge the political outfall in their respective constituencies. Most importantly, Eurozone governments still need to agree on how to strengthen the institutional setup of the area.
The siege mentality that continued to transpire today does not bode well. European Commissioner Rehn gave a western movie-like image of Eurozone countries gathered around the EUR to defend it at all costs; Sweden’s Finance Minister compared investors to packs of wolves; Juncker, head of the Eurogroup, said the whole Eurozone was suffering an organized attack, and Rehn said the funds would be aimed at supporting especially those countries currently under "speculative attack". The fascinating contradiction of course is that to get the new stabilization fund up and running, the Eurozone would need to borrow up to EUR500bn from the same speculators who, organized and merciless like packs of wolves, are supposedly trying to sink the Eurozone.
The headline number is impressively large: EUR750bn is nearly six times the amount pledged to support Greece’s three-year adjustment program. Of this, EUR440bn would be raised by a "special purpose vehicle" with guarantees by Eurozone member governments; another EUR60bn would be raised separately by the European Commission to supplement the balance of payments facility already established and used so far to support three central and eastern European Eurozone candidates (Latvia, Hungary and Romania; the original amount in the facility was EUR50bn). The IMF would contribute "at least half as much as the EU", so EUR250bn. This maintains the two-thirds/one-third burden sharing proportions agreed in the case of Greece. European Commissioner Rehn also said the loans from this stabilization fund would be priced with the same mechanism as those extended to Greece, implying a rate of about 5%.
To allay concerns about the speed with which this gargantuan financial package can be activated, the ECB will step in with direct purchases of government bonds as well as additional liquidity provisions. In a press release, the ECB announced it would "conduct interventions in the euro area public and private debt securities markets (Securities Markets Programme) to ensure depth and liquidity in those market segments which are dysfunctional." The magnitude of the interventions is going to be discussed by the Governing Council. Moreover, the ECB said it would "adopt a fixed-rate tender procedure with full allotment in the regular 3-month longer-term refinancing operations (LTROs) to be allotted on 26 May and on 30 June 2010" and "conduct a 6-month LTRO with full allotment on 12 May 2010, at a rate which will be fixed at the average minimum bid rate of the main refinancing operations (MROs) over the life of this operation".
Somewhat disconcertingly, the announcement follows not just Trichet’s statements last Thursday that direct bond purchases had not even been discussed in the ECB’s Governing Council meeting, but also statements by ECB Governing Council member Nowotny earlier this evening claiming that this was "a day for Finance Ministers" and that it is not the ECB’s job to finance budget deficits.
Even with Portugal and Spain announcing further fiscal adjustment measures in the coming days, it will be hard not to see this as a loss of credibility and independence for the ECB. The ECB has stated that the interventions in the secondary market will be sterilized, so that the measures will not affect the stance of monetary policy. It argues that these purchases are aimed at correcting market distortions rather than easing overall monetary conditions, and stresses that they have been agreed also in light of the commitment by member states to take all necessary measures to meet their fiscal targets. Liquidity has indeed declined sharply in some of the sovereign bond markets, and ECB bond purchases at this stage can also be seen as a preventive measure: while current spreads on Portuguese and Spanish bonds currently do not look greatly out of line with fundamentals, market movements in the last few days had highlighted the risk that self-fulfilling panic might set in, and the ECB needed to be ahead of the market.
In the short term, the ECB’s intervention will be a crucial element of the package, bringing immediate relief; the longer term implications however could be extremely detrimental. Much will depend on whether or not Eurozone governments quickly follow through on their pledge to accelerate fiscal consolidation efforts: if they do, the ECB might still be able to argue that it has offered temporary support to offset impending market dislocations; if they do not, it will be hard for the ECB to fight off the charge of monetizing excessive fiscal deficit. So far, however, no strengthening of fiscal discipline mechanisms has been agreed, and all we have is the commitment to enforce the procedures and sanctions of the Stability and Growth Pact—which unfortunately has a rather dismal track record.
The new stabilization fund represents another step towards "passive" fiscal integration, that is member countries explicitly assuming joint responsibility for each other’s obligation. To avoid the risk of violating the no-bailout clause, this is done in the form of a pooling of resources to rescue member countries in stress and not formally shouldering their existing debt obligations; moreover, financial support would be extended only based on tough conditionality on adjustment measures. However, the substance is the same: member countries have to jointly put their resources at stake to support the weaker members. The German cabinet held a frantic consultation in Berlin to determine whether this might constitute a violation of the country’s Constitution. Note that Germany’s contribution to the Greece rescue operation had already been challenged at the Constitutional Court, but the challenge had been rejected. We can now expect a fresh legal challenge to be brought soon, especially in light of the ECB’s decision to buy government bonds.
The challenge now is to rebuild the "active" fiscal integration, starting with stronger and enforceable incentives for fiscal discipline, which might otherwise pushed to converge to its lowest common denominator by the irresistible forces of moral hazard. The IMF’s contribution to the fund is a revealing signal in this respect: use of the facility would most likely be accompanied by an IMF program to ensure a credible adjustment program. This is a positive feature, but also depressing confirmation that at this stage that the EU is unable to design and enforce conditionality on its own. The true decisions needed for the longer-term survival of the Eurozone still need to be taken.
Marco Annunziata
Chief Economist, UniCredit Group
Global Head of Economics, Fixed Income & FX Research
This truly is overwhelming force, and should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion. Not only is the headline number stunning, but the ECB’s decision to intervene in the secondary market should offset concerns about the time it will take to deploy the stabilization funds, and the reinstatement of the FX swap lines gives a signal of the global support backing Eurozone policymakers—as the Eurozone’s potential sovereign debt crisis had suddenly emerged as the single biggest threat to global financial stability.
The longer term consequences will take longer to assess and digest: if the stabilization fund needs to be drawn upon, this would involve the issuance of potentially hundreds of billion euros in additional eurozone debt; the ECB’s move will raise serious questions about its independence; and governments will have to gauge the political outfall in their respective constituencies. Most importantly, Eurozone governments still need to agree on how to strengthen the institutional setup of the area.
The siege mentality that continued to transpire today does not bode well. European Commissioner Rehn gave a western movie-like image of Eurozone countries gathered around the EUR to defend it at all costs; Sweden’s Finance Minister compared investors to packs of wolves; Juncker, head of the Eurogroup, said the whole Eurozone was suffering an organized attack, and Rehn said the funds would be aimed at supporting especially those countries currently under "speculative attack". The fascinating contradiction of course is that to get the new stabilization fund up and running, the Eurozone would need to borrow up to EUR500bn from the same speculators who, organized and merciless like packs of wolves, are supposedly trying to sink the Eurozone.
The headline number is impressively large: EUR750bn is nearly six times the amount pledged to support Greece’s three-year adjustment program. Of this, EUR440bn would be raised by a "special purpose vehicle" with guarantees by Eurozone member governments; another EUR60bn would be raised separately by the European Commission to supplement the balance of payments facility already established and used so far to support three central and eastern European Eurozone candidates (Latvia, Hungary and Romania; the original amount in the facility was EUR50bn). The IMF would contribute "at least half as much as the EU", so EUR250bn. This maintains the two-thirds/one-third burden sharing proportions agreed in the case of Greece. European Commissioner Rehn also said the loans from this stabilization fund would be priced with the same mechanism as those extended to Greece, implying a rate of about 5%.
To allay concerns about the speed with which this gargantuan financial package can be activated, the ECB will step in with direct purchases of government bonds as well as additional liquidity provisions. In a press release, the ECB announced it would "conduct interventions in the euro area public and private debt securities markets (Securities Markets Programme) to ensure depth and liquidity in those market segments which are dysfunctional." The magnitude of the interventions is going to be discussed by the Governing Council. Moreover, the ECB said it would "adopt a fixed-rate tender procedure with full allotment in the regular 3-month longer-term refinancing operations (LTROs) to be allotted on 26 May and on 30 June 2010" and "conduct a 6-month LTRO with full allotment on 12 May 2010, at a rate which will be fixed at the average minimum bid rate of the main refinancing operations (MROs) over the life of this operation".
Somewhat disconcertingly, the announcement follows not just Trichet’s statements last Thursday that direct bond purchases had not even been discussed in the ECB’s Governing Council meeting, but also statements by ECB Governing Council member Nowotny earlier this evening claiming that this was "a day for Finance Ministers" and that it is not the ECB’s job to finance budget deficits.
Even with Portugal and Spain announcing further fiscal adjustment measures in the coming days, it will be hard not to see this as a loss of credibility and independence for the ECB. The ECB has stated that the interventions in the secondary market will be sterilized, so that the measures will not affect the stance of monetary policy. It argues that these purchases are aimed at correcting market distortions rather than easing overall monetary conditions, and stresses that they have been agreed also in light of the commitment by member states to take all necessary measures to meet their fiscal targets. Liquidity has indeed declined sharply in some of the sovereign bond markets, and ECB bond purchases at this stage can also be seen as a preventive measure: while current spreads on Portuguese and Spanish bonds currently do not look greatly out of line with fundamentals, market movements in the last few days had highlighted the risk that self-fulfilling panic might set in, and the ECB needed to be ahead of the market.
In the short term, the ECB’s intervention will be a crucial element of the package, bringing immediate relief; the longer term implications however could be extremely detrimental. Much will depend on whether or not Eurozone governments quickly follow through on their pledge to accelerate fiscal consolidation efforts: if they do, the ECB might still be able to argue that it has offered temporary support to offset impending market dislocations; if they do not, it will be hard for the ECB to fight off the charge of monetizing excessive fiscal deficit. So far, however, no strengthening of fiscal discipline mechanisms has been agreed, and all we have is the commitment to enforce the procedures and sanctions of the Stability and Growth Pact—which unfortunately has a rather dismal track record.
The new stabilization fund represents another step towards "passive" fiscal integration, that is member countries explicitly assuming joint responsibility for each other’s obligation. To avoid the risk of violating the no-bailout clause, this is done in the form of a pooling of resources to rescue member countries in stress and not formally shouldering their existing debt obligations; moreover, financial support would be extended only based on tough conditionality on adjustment measures. However, the substance is the same: member countries have to jointly put their resources at stake to support the weaker members. The German cabinet held a frantic consultation in Berlin to determine whether this might constitute a violation of the country’s Constitution. Note that Germany’s contribution to the Greece rescue operation had already been challenged at the Constitutional Court, but the challenge had been rejected. We can now expect a fresh legal challenge to be brought soon, especially in light of the ECB’s decision to buy government bonds.
The challenge now is to rebuild the "active" fiscal integration, starting with stronger and enforceable incentives for fiscal discipline, which might otherwise pushed to converge to its lowest common denominator by the irresistible forces of moral hazard. The IMF’s contribution to the fund is a revealing signal in this respect: use of the facility would most likely be accompanied by an IMF program to ensure a credible adjustment program. This is a positive feature, but also depressing confirmation that at this stage that the EU is unable to design and enforce conditionality on its own. The true decisions needed for the longer-term survival of the Eurozone still need to be taken.
Marco Annunziata
Chief Economist, UniCredit Group
Global Head of Economics, Fixed Income & FX Research
Madiba
Forumer storico
feliceanima
Forumer attivo
gipa in due parole grazie giusto due
gipa69
collegio dei patafisici
Giudizio sulle scelte del fine settimana:
sul breve positivo
sul lungo dipende in quanto mette in discussione l'indipendenza della BCE e potrebbe essere negativa se non accompagnato da una rimodulazione delle politiche fiscali e soprattutto da una maggiore disciplina fiscale.
sul breve positivo
sul lungo dipende in quanto mette in discussione l'indipendenza della BCE e potrebbe essere negativa se non accompagnato da una rimodulazione delle politiche fiscali e soprattutto da una maggiore disciplina fiscale.
feliceanima
Forumer attivo
grazie mille
f4f
翠鸟科
yesss
pensavo che ad avere dei veri governanti e non dei boasting clowns
questa settimana sarebbe perfetta per una importante manovra, sfruttando l'emotività del pericolo scampato e dimostrando di sapersi muovere prima che i mercati impongano cmq le stesse scelte, e quindi gambizzando le aspettative negative, e sfruttando la distanza dalle prossime elezioni
insomma, dopo 'shock and awe', una avanzata coraggiosa nelle retrovie nemiche, anche a costo di lasciare sul campo qualche reggimento
ma noi abbiamo Berluskon, mica Guderian
Fernando'S
Forumer storico
Fernando'S
Forumer storico
niente tutto normale
Berlusconi ha fatto qualche telefonata e ha risolto tutto
...stai tranquillo che Silvio c'è
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