Germany has sold €3.9bn of six-month bills at a negative interest rate. The Bundesbank just announced that it sold the debt, repayable in July, at a average yield of - 0.0122%. That means that investors agreed to receive less than they lent to Germany, when the bills are repaid. According to the Bundesbank, this is the first time that investors have agreed a negative yield at an auction of German debt. So why would anyone accept a negative interest rate? Typically, this happens for two reasons. Either buyers want protection from deflation, or they fear that there is nowhere better to place their money. In this case, the rush for Safe Havens is probably to blame. In contrast, Hungary's borrowing costs have been driven even higher today, as the country's political crisis continued to fuel fears that it could default. Hungary sold 40bn forints (£18m) of six-week debt (repayable in late February) this morning, but was forced to agree an interest rate of 7.77% (up from 7.24% at the previous auction of this kind). In other news, Der Spiegel has reported that Greece may be heading for a disorderly default, which has sent the cost of insuring against non-payment on European sovereign debt upwards. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose as much as four basis points to 386, and was trading at 383 earlier this morning. In other, simpler words: the perception of credit quality is deteriorating.
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Germany held an auction of €4bn in six-month bills this morning, getting an average yield of -0.0122pc. In other words, investors were willing to pay Germany for the privilege of lending it money.
As eurozone worries increase, investors are seeking a safe place to stash their cash - even at the cost of letting Germany skim a little from the top.
It's the first time the figure has dipped into the negative, although the country sold €3bn at a barely-positive average yield of 0.001pc in December.
In other news, Der Spiegel has reported that Greece may be heading for a disorderly default, which has sent the cost of insuring against non-payment on European sovereign debt upwards.
The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose as much as four basis points to 386, and was trading at 383 earlier this morning. In other, simpler words: the perception of credit quality is deteriorating.
They just bounce from one crisis to another and each bounce is in the direction of fiscal and political union, it is one huge hollywood script, but now me saying it over and over is becoming one to, am i the cliff barns of dallas?, will i always not be heard? is the holy grail all about spelling and gramma, so although the king has no cloths you can only point it out if the commer is in the right place, oops, a white rabbit just knocked me over rabbiting about the time, oops it is late.
The Eurozone must have fiscal/monetary/political union, with sharing of (German) wealth and debt (Eurobonds) or the whole thing will come apart.
I'm of the opinion that it will come apart anyway because the fiscal/political union should have been instituted prior to introducing the Euro, not as an afterthought during a crisis.
Im with you on the commas and apostrophes, I get nailed for it all the time on here.
. I fail to understand why there has been little reaction from the other 15 members of the EZ to the "Merkozy initiatives". Are they merely happy to sit in silence and wait until the bottom falls out of the duo's plans and then state they were always against their designs? Talk is cheap and we are getting a lot from these two. Political talk is also hot air; I note that "greenhouse gases" will push back the projected date for the next Ice Age, so perhaps we should encourage more Merkozy gas emissions (just to make sure.....)
Today opens with the prospect of more summit inflation in the Euro zone as we have yet another meeting between Chancellor Merkel of Germany and President Sarkozy of France. It feels like they are never apart as one (failed) summit merges into the next. The various grand promises made in a blizzard of hype have increasingly tended to have the life expectancy of a May fly. Also there is a marked lack of democracy being displayed here as only two nations are meeting and yet there are seventeen nations in the Euro zone. One could add to the anti-democratic theme the fact that both Greece and Italy have new technocratic governments who have not submitted themselves to the ballot box.
Today’s version of the programme is that the two leaders who now meet so often that many have merged their names to the acronym Merkozy tell us that they will set a fiscal plan for the 17 Euro zone members. However let us take a look at how their previous grand designs have progressed.
Unbelievable, do investors see the financial structure so risky that they literally have to accept negative yields to keep their money safe?
Despite the efforts of Merkozy it looks like the debt crisis will simply be moving too fast for the EU to deal with, you don’t have to be an economist to see that a disorderly default of any Eurozone country looks very ugly indeed.
Germany held an auction of €4bn in six-month bills this morning, getting an average yield of -0.0122pc. In other words, investors were willing to pay Germany for the privilege of lending it money.
As eurozone worries increase, investors are seeking a safe place to stash their cash - even at the cost of letting Germany skim a little from the top.
It's the first time the figure has dipped into the negative, although the country sold €3bn at a barely-positive average yield of 0.001pc in December.
In other news, Der Spiegel has reported that Greece may be heading for a disorderly default, which has sent the cost of insuring against non-payment on European sovereign debt upwards.
The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose as much as four basis points to 386, and was trading at 383 earlier this morning. In other, simpler words: the perception of credit quality is deteriorating.
Germany held an auction of €4bn in six-month bills this morning, getting an average yield of -0.0122pc. In other words, investors were willing to pay Germany for the privilege of lending it money.
As eurozone worries increase, investors are seeking a safe place to stash their cash - even at the cost of letting Germany skim a little from the top.
It's the first time the figure has dipped into the negative, although the country sold €3bn at a barely-positive average yield of 0.001pc in December.
In other news, Der Spiegel has reported that Greece may be heading for a disorderly default, which has sent the cost of insuring against non-payment on European sovereign debt upwards.
The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments rose as much as four basis points to 386, and was trading at 383 earlier this morning. In other, simpler words: the perception of credit quality is deteriorating.
uber alles....2Der Spiegel has reported that Greece may be heading for
a disorderly default,"
EVERYONE KNOWS that Greece has been heading for a disorderly default for well over a year - except the EU elite of course .......
By the time the receipts from the 50% top rate tax start to fall off it will be too late to undo the damage done. The high earners that will have gone, won't necessarily come back.
Lower rates and get more tax revenue.
Bad almost always leads to badder.
Greece will default. Soon followed by at least
two other countries "redefining their status in the euro".
The Tobin Tax will immediately precipitate a corporate
exodus from Europe to Asia.
America will put the boot in. It will help the dollar,
their economy and Obama get re-elected.
The euro banks will report even bigger liquidity deficits.
The IMF will refuse to give more money.
By then, Sarkozy will have lost his election.
Merkel will be hounded to resign.
The utterly out of touch microcephalic labour lot
will blame Cameron.
Wish I could offer some good euro news. Can't.
• Merkel admits Germany split on financial transaction tax
• No aid package for Greece unless debt deal is done
• Germany sells €4bn in bonds for negative yield
• Soros: debt crisis more dangerous than 2008 turmoil
• Tobin tax 'could leave €116bn hole in EU finances'
• 'Door left open' for further IMF donation from UK
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