Posts Tagged ‘Stabilization Fund’

Counterparty Risk Increasing

Counterparty Risk Increasing

Courtesy of Rom Badilla, CFA – Bondsquawk.com

Due to the European debt crisis, counterparty risk is increasing as banks are reluctant to lend to each other, which is remiscient of the bank freeze at the beginning of the fiancial crisis of 2008. The LIBOR-OIS spread which is a gauge of banks willingness to lend, widened 2 basis points today to a spread of 26. Despite the unveiling of the near one trillion dollar Stabilization Fund last week, it continues to drift higher.  The spread has now increased 20 basis points from the most recent low achieved on March 15.

As mentioned last week here at Bondsquawk, the spread inched higher from 13 basis points in late July 2007 to 19 basis points the following week. As market conditions deteriorated, the widening accelerated. By late August, the spread widened to 73 basis points and the route was on. During the height of the financial crisis which is marked by the fall of Lehman Brothers, the spread reached a high of 364 basis points by October of 2008. While it remains to be seen if this will turn into another credit crunch as we have warned several days ago and as Bank of America’s Jeff Rosenberg had suggested earlier today, today’s action is certainly a growing concern and deserves further monitoring. 


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“We Will Defend the Euro, Whatever it Takes” Says EC President; Neither Speculators nor Goldman Sachs to Blame; What is the EU Really Defending?

"We Will Defend the Euro, Whatever it Takes" Says EC President; Neither Speculators nor Goldman Sachs to Blame; What is the EU Really Defending?

Euro Symbol

Courtesy of Mish

EU finance ministers are meeting this weekend in a mad race to Defend the Euro, whatever it takes.

On Friday, French President Nicolas Sarkozy Vowed to "Confront Speculators Mercilessly" via Secret Plans he could Reveal.

On Saturday, Sarkozy said "When the markets re-open Monday, we will have in place a mechanism to defend the euro. If you don’t think that’s significant, you haven’t been to many EU summits."

It seems secrets were needed on Friday, but not on Saturday, meaning of course there were no plans on Friday, secret or not.

Stabilization Fund Created – Undisclosed Amount

Bloomberg describes the setup in EU Finance Ministers Race to Ready Euro Fund Before Asia Opens

European Union finance ministers meet today to hammer out the details of an emergency fund to prevent a sovereign debt crisis from shattering confidence in the 11- year-old euro.

Jolted into action by last week’s slide in the currency to the lowest in 14 months and soaring bond yields in Portugal and Spain, leaders of the 16 euro nations agreed to the financial backstop at a May 7 summit. They assigned finance chiefs to get it ready before Asian markets open later today European time.

“We will defend the euro, whatever it takes,” European Commission President Jose Barroso told reporters in the early hours yesterday after the leaders met in Brussels.

European officials declined to disclose the size of the stabilization fund, to be made up of money borrowed by the EU’s central authorities with guarantees by national governments.

“When the markets re-open Monday, we will have in place a mechanism to defend the euro,” French President Nicolas Sarkozy said. “If you don’t think that’s significant, you haven’t been to many EU summits.” Sarkozy cancelled a planned trip to Moscow today to deal with the crisis.

In Brussels, German Chancellor Angela Merkel stepped up German calls for a closer monitoring of government finances and more rigorous enforcement of the deficit-limitation rules, originally drafted by Germany in the 1990s.

Europe will send “a very clear signal against those who want to speculate against the euro,” Merkel said.

Speculators Did Not Cause This Crisis

Speculators are not responsible for unsustainable Greek pension plans. Speculators…
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Boeing is doing crisis management all wrong - here's what a company needs to do to restore the public's trust

 

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Boeing is doing crisis management all wrong – here's what a company needs to do to restore the public's trust

Courtesy of Kelli Matthews, University of Oregon

In a crisis, time is not on your side.

A crisis creates a vacuum, an informational void that gets filled one way or another. The longer a company or other organization at the center of the crisis waits to communicate, the more likely that void will be filled by critics.

That’s exactly what&...



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Kimble Charting Solutions

Connect Series Webinar March 2018

Courtesy of Chris Kimble.

We cover dominating patterns in major global Indices, sectors, commodities and the metals markets.  We produce chart pattern analysis and empower people to improve entry and exit points.

To become a member of Kimble Charting Solutions, click here.

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Zero Hedge

US Home Price Growth Slowest Since 2012

Courtesy of ZeroHedge. View original post here.

Following disastrous starts and permits data, Case Shiller's home price index was expected to show growth continuing to slow. and it did, considerably worse than expected.

Case-Shiller's 20-City Composite grew at just 3.58% YoY in January (well below the 3.8% YoY expectation and December's 4.14% YoY print). This is the weakest annual growth since September 2012, decelerating for a 10th month in January as buyers held out for more affordable properties.

...



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Insider Scoop

Analyst: Apple's New Credit Card Bodes Well For Green Dot

Courtesy of Benzinga.

Apple Inc. (NASDAQ: AAPL) announced Monday it will launch its own branded credit card called Apple Card and this should be viewed as a positive for Green Dot Corporation (NYSE: GDOT), according t...



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ValueWalk

Tesla's Massive Increase In Delivery Volume In Europe And China

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing a few good posts on Tesla on the VIC message board about the massive increase in delivery volume in Europe and China.

41 – jcoviedo – 3 days 2 hrs ago

Re: Re: Re: Several bullish points

40

Q4 hedge fund letters, conference, scoops etc

Elon leaked...



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Chart School

Weekly Market Recap Mar 24, 2019

Courtesy of Blain.

It was looking like another week of Federal Reserve Kool Aid and crushing bears .. until Friday.  On the back of bad economic news out Europe, the yield curve inverted on the 3 month vs 10 year bond – before you fall asleep to that news, it is a quite important indicator for the economy (not necessarily the stock market… yet).   More on that in a bit.  As you can see the action in the bond market Friday was quite severe so it will be interesting to see the move in the coming few days.

As for the Federal Reserve:

The Federal Reserve signaled no more increase in interest rates this year and just one in 2020, according to its new ‘dot plot,’ and the bank said it would...



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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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