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HomeThe ISDA Emperor Also Has No Clothes
Posted by Larry Doyle on March 2nd, 2012 7:42 AM |
Writing down sovereign debt by over 50% and subordinating one class of bondholders from another –those being the royalty ensconced within the European Central Bank — would not qualify as a “credit” event, now would it? No way! Of course not! Why would it?!
Not when those compelled to pay out on the supposed “insurance” within derivative contracts are the royalty within other large international banks, and they sit in the positions of judge, jury, and counterparty in the case.
Welcome to the world of international finance circa 2012. (more…)
Might Germany “Annex” Greece and “Breakthrough to a New Europe”?
Posted by Larry Doyle on January 31st, 2012 6:37 AM |
You do not need me to tell you that it can get mighty cold in Germany during the winter months.
Don’t you think many Germans would like a nice warm vacation in the Greek Isles when those winds are whipping through the cold, dark forests and industrial cities of Deutschland? Sounds nice, heh??
Think the Germans may bargain for discount vacations in Greece if not outright ownership of some prime beachfront real estate in the Greek Isles as potential compensation for bailing Greece out of its current fiscal mess?
I am speaking largely in jest…but not totally. Why so? Let’s navigate. (more…)
Ireland’s Sinn Fein Leaders Say, Screw ‘EU’…and the IMF and ECB as Well
Posted by Larry Doyle on November 23rd, 2010 7:03 AM |
Is there any greater motivation for man than the sense of being disenfranchised?
Throughout history, those who have been disenfranchised have used that reality as the motivation to move mountains…..if not governments. What stokes the fire of those who would take up their cause and speak out on behalf of their people? Not only a sense of injustice but often merely a lack of representation. We witness a growing sense of all these realities in the Republic of Ireland. Why’s that?
The Irish citizenry are increasingly aware that the Irish “bailout” brokered yesterday by the IMF, the European Commission, and European Central Bank is truly a backdoor bailout of international banking institutions on the continent with the costs to be borne by the Irish people. While Ireland’s sitting government may have balked at this bailout, ultimately they caved to the pressure from the powers within the EU. Sinn Fein, the opposition party in Ireland, is speaking out aggressively on behalf of the Irish people who are bearing the cost of bailing out international banks.
The Euro and other related markets overnight are very much aware of the growing opposition within Ireland to the ‘backdoor bank bailout’. Risk premiums are rising across many market segments as a result. Let’s navigate ‘across the pond’ to the Emerald Isle and listen to the leaders of Sinn Fein, including its ‘tough as nails’ President Gerry Adams (the second to speak in this video clip), rail on the sitting Irish government, Fianna Fail, and those within the EU who orchestrated this ‘backdoor bank bailout.’
Navigate accordingly.
Larry Doyle
Irish Bailout Is a Backdoor Bailout of European Banking System
Posted by Larry Doyle on November 18th, 2010 6:20 AM |
What is going on in Ireland? Those forty shades of green look so inviting. How could it be that the Emerald Isle is the center of the current financial turmoil? Well it is…and it isn’t.
How is it that a variety of Irish officials can claim that they neither need nor want a bailout from the EU but a bailout is assuredly on the way? Are we witnessing a sovereign nation losing the ability to control its own affairs? There is no doubt the Irish are a proud people but are they also being overly stubborn at this juncture (believe me, I know proud and stubborn…!!)? Are the Irish failing to accept the inevitable? Hadn’t the Irish attempted a Swedish style approach in terms of aggressively recognizing losses within their financial sector?
While the answer to all of these questions is a varying degree of the affirmative (especially the proud and stubborn..!!), to truly understand what is happening in Ireland, we actually need to shift our focus to the European mainland. Really? Why’s that? Let’s navigate the tangled web and interconnectedness of the global banking system circa 2010. (more…)
Beggar Thy Neighbor
Posted by Larry Doyle on October 5th, 2010 12:17 PM |
So much has happened along our economic landscape over the last two to three years that it is hard to weigh the magnitude and depth of many of the developments. That said, the simple fact is the tectonic plates underlying our global economy have shifted massively as a result of the enormous financial earthquake of 2008. While global governments and central banks have performed varying degrees of triage to save states, nations, and regions, the movements of the plates are continuing along under the surface. To that end, what is the economic reality now bubbling above the surface given the shift in our tectonic plates below? Let’s navigate and review the reality known as Beggar Thy Neighbor, defined by our friendly Investing primer as,
An international trading policy that utilizes currency devaluations and protective barriers to alleviate a nation’s economic difficulties at the expense of other countries. While the policy may help repair an economic hardship in the nation, it will harm the country’s trading partners, worsening its economic status. (more…)
May 15, 2010: Market Week in Review
Posted by Larry Doyle on May 15th, 2010 6:12 AM |
The European Union, the European Central Bank, and the International Monetary Fund (and the Fed, as well, although they don’t want to truly highlight it) provide $960 billion in backstops for the Euro-zone and what happens? The Euro ends the week lower by 3%!! Ladies and gentlemen, that is nothing more than a major “F&%@ Y#&“ on behalf of global investors to the aforementioned central banks and government entities.
Think there is tension in Euroland, and specifically between France and Germany? As The UK-based Telegraph reports, President Nicolas Sarkozy ‘Threatened to Pull France Out of Euro’:
President Nicolas Sarkozy slammed his fist on the table and threatened to pull France out of the euro at a meeting of European leaders deciding Greece’s aid package last Friday, according to Spain’s El Pais newspaper.
The last time there was this kind of tension between these countries, guess who was coming ashore at Normandy? (more…)
Let’s Revisit Europe: The Weakest Link
Posted by Larry Doyle on March 17th, 2009 5:15 AM |
I thank our loyal reader in Michigan, Mr. Fiscal Liberal, for sharing with us a piece written by Simon Johnson, the former chief economist of the International Monetary Fund, a professor at the MIT Sloan School of Management, and a senior fellow at the Peterson Institute for International Economics.
Mr. Johnson writes about the growing problems in Europe. I am hard pressed to see how the European situation, both in the East and West, can not end badly. There are too many economies that are effectively insolvent or on the brink of insolvency. I believe this is the region of the world which will experience increased economic strife leading to social unrest and political change. Can the problems in Europe be contained given the massively interconnected world of global finance?
Thank you again FL for sharing this very enlightening piece from Simon Johnson!!
G-20s Real Agenda Should be Saving Europe from Itself
By Simon Johnson
Last Updated: 10:28AM GMT 16 Mar 2009The media coverage of the G20 finance ministers meeting this weekend was dominated by the apparent battle between those who support more fiscal stimulus and those who want to impose more regulations on the financial system.
This, we are led to believe, is the big debate facing the full G20 heads of government summit early next month: the US is pushing for a bigger global fiscal stimulus (2pc extra government spending from everyone, to be monitored by the IMF), while the continental Europeans are holding out for greater regulation. Gordon Brown is trying hard to cast himself as the broker for any apparent deal. (more…)
