"Two rescue funds are to be used to buy the debts of the troubled economies, the
cost of which have reached record highs in recent weeks. It is hoped that the
move, which represents a substantial shift in policy for Germany’s chancellor,
Angela Merkel, will send a strong signal to financial markets that Europe’s
biggest economy is finally prepared to back its weaker neighbors. Mrs Merkel
and other European leaders have come under intense pressure at this week’s G20
summit to take radical action to stem the growing euro crisis which has pushed
up the cost of Spanish bonds to unsustainable levels. The communiqué issued at
the end of the G20 summit, which finished in Mexico last night, said that
European leaders had agreed to take action to bring down borrowing rates. ....
Under the proposed deal, two European rescue funds – the £400 billion (€500
billion) European Stability Mechanism (ESM) and the £200 billion (€250 billion)
European Financial Stability Facility (EFSF) – will buy bonds issued by European
countries." ---- Is there something I am missing? ....The EFSF is backed up by,
amongst others, €92 Billions from Spain and €139 Billions from Italy. Yet these
countries are to receive some €600 Billions in loans. So they are loaning money
to this wonderful fund, so that they can draw down their money plus more to bail
out their failed economies. But what purpose does this serve? If it does not
cost the children of these countries more in interest repayments, it will cost
the current adult population in unnecessary administrative costs....Does no one
within the EZ hierarchy, have a problem with this idea? It sure baffles the hell
out of me. To put it into perspective, I 'loaned' £10,000 to my bank in the form
of a Bond. I receive interest at 3%. Now I borrow £10,000 from the same Bank who
charge me 6% interest. So I will lose 3%= £300 per year on the deal. That is
stupid. What I should do, is sell (cash in) my bond and use the money raised
rather than borrow more. So why is it different for the EZ, et al?
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, June 20, 2012
Is there something I am missing?...
"Two rescue funds are to be used to buy the debts of the troubled economies, the
cost of which have reached record highs in recent weeks. It is hoped that the
move, which represents a substantial shift in policy for Germany’s chancellor,
Angela Merkel, will send a strong signal to financial markets that Europe’s
biggest economy is finally prepared to back its weaker neighbors. Mrs Merkel
and other European leaders have come under intense pressure at this week’s G20
summit to take radical action to stem the growing euro crisis which has pushed
up the cost of Spanish bonds to unsustainable levels. The communiqué issued at
the end of the G20 summit, which finished in Mexico last night, said that
European leaders had agreed to take action to bring down borrowing rates. ....
Under the proposed deal, two European rescue funds – the £400 billion (€500
billion) European Stability Mechanism (ESM) and the £200 billion (€250 billion)
European Financial Stability Facility (EFSF) – will buy bonds issued by European
countries." ---- Is there something I am missing? ....The EFSF is backed up by,
amongst others, €92 Billions from Spain and €139 Billions from Italy. Yet these
countries are to receive some €600 Billions in loans. So they are loaning money
to this wonderful fund, so that they can draw down their money plus more to bail
out their failed economies. But what purpose does this serve? If it does not
cost the children of these countries more in interest repayments, it will cost
the current adult population in unnecessary administrative costs....Does no one
within the EZ hierarchy, have a problem with this idea? It sure baffles the hell
out of me. To put it into perspective, I 'loaned' £10,000 to my bank in the form
of a Bond. I receive interest at 3%. Now I borrow £10,000 from the same Bank who
charge me 6% interest. So I will lose 3%= £300 per year on the deal. That is
stupid. What I should do, is sell (cash in) my bond and use the money raised
rather than borrow more. So why is it different for the EZ, et al?
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11.17am: Robert Jenkins, an external member of the Financial Policy Committee, has given a speech to an audience of traders in which he provides a good illustration of what is going on the eurozone - and crucially warns of the possibility of "state intervention" of the kind that took place post-war. The FPC formally meets on Friday and is the body that sits inside the Bank of England looking for systemic risk in the financial system. My colleague Jill Treanor reports:
Jenkins points out that the eurozone had worked - until now - on the basis that there was no "cross-border" risk between one country and another.
But the Greek crisis has introduced doubts that all countries are the same. "The spectre of cross border risk is back. Its impact is difficult to quantify but must not be underestimated. Creditors in the north are cutting back facilities to the south. Company treasurers sweep their euro balances daily. Float has fallen. Trade terms have tightened, security holdings have shifted, and direct investments delayed. Meanwhile, concerned citizens are withdrawing their euros - just in case. Many appear to be concerned. Have you tried to buy a flat in London lately? You have competition. Property agents openly refer to the "Bank of Belgravia." Want to open an account in Lugano? Get in line".
He notes that "capital is leaving the very countries that need it - and flowing to the countries that don't". While the European Central Bank has been stepping in to provide liquidity, he said that "is not enough to contain an accident" and that confidence must be restored in the "entire euro construct'.
And, he points out "out global financial system is accident prone. This is party because of the numbers have become too big". He also points that "limitless liquidity" in the system is fading and that government will intervene to try to protect their countries.
"Short-selling bans in Europe and bond purchase penalties in Brazil
are a foretaste of the future. I recommend that you send your best and your brightest to the library to research state intervention in the post war period. It could come in handy. For like clean air and water, market
liquidity is no longer limitless and no longer free".
Producers who had intended to start distributing some 2,700 crates of fresh fruit and veg at 10 AM were forced to begin several hours earlier because of the crush. Each crate contained up to 12 kilos of produce worth around €13 if bought at the local market. In barely three hours the entire lot had gone – testimony, once again, to the hard times so many Greeks are enduring after waves of pay and pension cuts and tax increases in a fifth straight year of recession.
"It's almost too good to be true," one radio new anchor said. The head of the agricultural association behind the move described it as "act of solidarity."
"Producers on Crete are sending a message of solidarity to Greeks who have a problem coping and can no longer buy our produce. We also have the same problems and so must help one another."
The mayor of Athens Yiorgos Kaminis who also backed the iniative said "there aren't words to thank them."
Although no one doubts that a new three-party government will be announced, Greek media reports are now suggesting the power-sharing talks could continue through to Thursday.
"The belief that the exploratory mandate that Antonis Samaras has in his hands expires this afternoon is wrong. The mandate expires tomorrow afternoon since it is only then that the three-day period foreseen by the constitution is completed," wrote the well-briefed Newsit media portal. "So the three leaders still have time to continue negotiations."
OK, that’s another Greek election out the way. Roll on the next one.
The New Democracy party won the largest share of the vote at Sunday’s election. But it will have to rely on its discredited socialist rivals Pasok to form a government. Talks will start today. But who knows if a government will be in place with a workable plan by the time of the next big Euro encounter – the Greece v Germany quarter-final on Friday?
Even if the two parties can form a coalition – without the involvement of the anti-bailout party Syriza - they still want to renegotiate the latest €130bn rescue. So much is still up for grabs, even though the outcome could have been worse – and the Grexit has been postponed for another day.
German question
The yield on Spanish 10-year bonds fell to 6.96% on Wednesday morning, dropping slightly below the 7% level seen as unsustainable in the long-run.
For Italian bonds of the same maturity, the yield was down to 5.85%.
These yields give an indication of the level of concerns in a country's finances, as investors demand higher returns as worries increase. A government's cost of borrowing is only known when it sells bonds at an auction.
Yield
The return to an investor from buying a bond implied by the bond's current market price. It also indicates the current cost of borrowing in the market for the bond issuer. As a bond's market price falls, its yield goes up, and vice versa. Yields can increase for a number of reasons. Yields for all bonds in a particular currency will rise if markets think that the central bank in that currency will raise short-term interest rates due to stronger growth or higher inflation. Yields for a particular borrower's bonds will rise if markets think there is a greater risk that the borrower will default.
EUROPEAN leaders are inching towards a colossal new £600billion bail-out in a panic-stricken attempt to save the collapsing euro, it emerged last night.
German Chancellor Angela Merkel is understood to have finally caved in to pressure to allow her country’s financial firepower to be used to support the single currency.
Under the plan, the European Union’s multi-billion-pound rescue funds will be used to buy up the debts of Spain and other crisis-hit eurozone countries.
Brussels officials believe the move is a significant breakthrough in the desperate search for the “big bazooka” to end frenzied market speculation over the euro’s future.
No to fascism, my parents generation fought it, and many lives were lost fighting it, but we need a truly right-wing brand of politics right now.
We need to:
Regain our soveriegn power, all of it.
Stop immigration.
Stop spending billions in overseas aid.
Put our 'house' in order.
I agree and...............
The £BILLIONS sent in free money to toilets like Yemen and Somalia to train terrorists to come here and kill us. To Pakistan to buy Chinese jets and subs. To India to give to Africa for better raw material deals than we get and to buy 146 French Rafael fighters.
The £Billions handed to the I. M. F. that will be used to bail out the irresponsible Greeks, Portuguese and it even gives to the Argentines.
The £Millions spent on foreign criminals who are imprisoned after arriving with the express intent to prey on the U.K.
The £Millions spent keeping tabs on known potential terrorists and sympathisers.
The £Billions spent on illegal immigrants. The asylum seekers who did not declare their status in the first safe country they came to and therefore 99% of them are illegals.
The £ BILLIONS spent on benefits and by the NHS on migrants who have contributed sweet F.A. and when they do work repatriate most of their wages to their home countries. Our government even pays benefits to those countries directly.
The £ Billions spent on those who start claiming a pension for life in their 20's The unemployable feckless sub culture who have no intention of contributing other than to breed another generation of benefit ponces.
The £Millions spent on health tourists who arrive on tourist visas and have hospital treatment that is never recovered, for example the five babies born to a tourist Nigerian.
The £ Millions spent on such ridiculous projects as permanent sites for 'travellers' who do not travel and to clean up the mess they make wherever they go.
The £ BILLIONS sent to the E.U. to finance totally inefficient hobby smallholders who call themselves French farmers whilst our farmers try to compete.
The £ BILLIONS sent to the financial black hole of Brussels.
The list goes on and on. But if your M.P. is like mine, Michael Ellis, they just do not want to know.
The issues of honours, executive pensions, salaries,, bonuses and lawful tax avoidance defence spending are arguments stirred up by the government because either they do not have the balls to confront the real issues or they condone them. Any headline will do to divert the attention of the electorate from the domestic financial dogs breakfast
German Foreign Minister sets out plans for European political unionA group of ten EU Foreign Ministers, chaired by Germany’s Guido Westerwelle, have put forward proposals to use the eurozone crisis as a stepping stone towards establishing a ‘political union’ by transferring more power to the EU, including the creation of a European monetary fund, a European army and a European finance minister. The proposals were strongly criticised by Frank Schäffler, an MP with Westerwelle’s liberal FDP party, who argued that the plan was incompatible with liberal principles and that Europe “doesn’t need a centralised and planned economy.”FT Bloomberg Handelsblatt Welt
A deal has been struck to form a new Greek coalition government, the leader of the Greek Socialists (Pasok) says.
"Greece has a government," Evangelos Venizelos said, following talks with the conservative election winner Antonis Samaras.
Details are expected to be finalised later on Wednesday, the BBC's Mark Lowen reports from Athens.
The small Democratic Left party is also expected to be in a ruling coalition with Pasok and New Democracy.
Democratic Left leader Fotis Kouvelis said "we decided to give a vote of confidence to the government that will be formed".
New Democracy, led by Mr Samaras, has until Thursday to form a government, otherwise the opposition leftist bloc Syriza gets a chance.
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