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Posts tagged ‘Basis point’

Credit default swaps and treason in Greece

The revelations of Credit default swaps and treason in
Greece should start to flash red lights here in Ireland as there are enormous
movement in Irish credit default swaps spreads. With well placed insiders are
able to make huge money and nobody is calling for a public enquire, these financial
instruments of mass destruction are been used and nobody knows who’s benefiting
from them!

Are we not going down the obvious road to default because of
a conflict of interest by those that are charged with this decision??? How do
we know that special interests are not been looked after???

Can we thrust our politicians? I know what my answer is !

AIB has already defaulted see here

The International Swaps and Derivatives Association (ISDA) yesterday said that   a “credit event” had occurred on Allied debt, meaning the bank has   effectively defaulted on its debt, a situation the Irish government has gone   to extreme lengths to avoid.

Credit default swaps (CDS) sold on Allied subordinated bonds and, crucially,   its senior debt, have been activated by the decision of the ISDA   determinations committee that decides whether a borrower has defaulted.

The decision by the committee, which is made up of 10 major banks, follows the   announcement earlier this month by the Irish High Court of a “subordinated   liabilities order” that changed the terms under which junior debt in   Allied was originally sold, forcing holders of the bonds to accept an   extension in the maturity of the debt to 2035.

Allied had already missed a coupon payment on its Lower Tier 2 debt. However,   changes in the law enabled the bank to avoid being forced to be formally   placed in default.

For the market, ISDA’s decision renders this move largely irrelevant as it   means the bank will be categorised as in default in the eyes of investors.(source http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8590428/Allied-   Irish-Bank-has-defaulted-says-derivatives-body.html  )

Portugal Warns of Political Crisis and Need for Bailout

With all eyes focused on Japan, it’s easy to miss significant events elsewhere.

For example, the sovereign debt crisis is still unfolding in Europe, and the “agreement” in Brussels last week solved nothing even though one might not know it from looking at the Euro.

Please consider Portugal yields rise, government warns of political crisis

Portugal’s government blamed higher rates paid at a debt auction on Wednesday on the opposition’s refusal to back its latest austerity plans, warning a political standoff could force it to seek a bailout.

Portugal’s plight has become yet more complicated by the fact that the main opposition Social Democrats have refused to back the government’s latest austerity plans, which are aimed to ensure the country meets its budget goals.

“Failure to approve the new measures in the budget plan would push the country to external help,” Finance Minister Fernando Teixeira dos Santos told parliament’s budget committee. “Current market conditions are unsustainable in the medium- and long-term.”

Prime Minister Jose Socrates warned on Tuesday that his minority government would be unable to continue if the country’s long-term economic strategy, which includes the latest austerity measures, was not passed in parliament.

“Yield levels in Portugal still trade above their snowball level — where the level of interest charged means their level of debt stock is going up — and that means that longer-term the situation, despite their best efforts, is getting worse not better,” said rate strategist Charles Diebel at Lloyds Bank.

The Portuguese, who are facing higher taxes, lower social benefits and a likely return to recession this year, have stepped up protests against austerity. But it was not clear they want a change of government.

Moody’s cut Portugal’s sovereign debt rating by two notches to A3 late on Tuesday and said it might have to downgrade again given the impact of high borrowing costs and the difficulty of meeting tough fiscal targets.

The yield on Portugal’s 10-year bonds was at 7.67 percent while the spread to safer German Bunds stood at 456 basis points, up from Tuesday’s 446 basis points. Risk premiums hit euro lifetime highs last week.

Portugal 10-Year Government Bond Yields

Yields are about 20 basis points below the levels reached last week, but these rates will sink Portugal in due time. Portugal will need a “bailout” whether or not the country gets it political act together.

However, it’s important to note that is it not really Portugal that will be bailed out, but rather German, French, and UK banks (just as with Ireland and Greece).

How long these countries are willing to put up with this remains to be seen

source: http://globaleconomicanalysis.blogspot.com/2011/03/portugal-warns-of-political-crisis-and.html.
Comment:

The Irish public have been deceived ,they thought were voting for change but instead they got more of the same for the next two years according to the new governments 5 point plan . When these two years are up we will be utterly brook and the rats will then leave the ship when nothing else is left for them to take .Our airports will be privatized, our ports, our natural resources and our roads will be sold off along with the ESB, Board na Mona, board Gas and maybe  our forests too  .We might then stand up and make the changes our political masters won’t make!

Lenihans Houdini act with States Borrowings

The rate the State pays to borrow money reached a new peak of more than 7 per cent today.

The yield on Ireland’s 10-year bond climbed 12 basis points to 7.36 percent as of 10:29 p.m. in London this morning and by 13.00hrs today it was back down to 723 points, or 7.23 per cent, at 1pm.
The spread between Irish bonds and the German Bund also reached a euro-era high of 477 points.
Bond prices spiked last week following the collapse of Portugal’s budget talks, while Greece’s tax revenue shortfalls have reignited fears that peripheral European states may struggle to cut deficits.

The extent of and uncertainty surrounding the €15 billion budgetary adjustment being sought by the Government here in Ireland will have some effect.

Minister for Finance Brian Lenihan said the negative developments in Greece and Portugal had helped push Irish Government bond yields up in the secondary market. This of course is crap it is because Lenihan has lost all credibility with the markets, with his constant Houdini act of pulling ever more borrowings out of his hat against a background of diminishing tax revenue speaks for itself .

This minster is totally out of his debt and should be removed for all our sakes!

Ireland needs her patriots to stand up now and be counted isn’t she worth it ???????

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