http://harveyorgan.blogspot.com/2012/05/spanish-10-yr-bonds-rise-to-608.html
(courtesy WND)
WND EXCLUSIVE
Banking giant HSBC 'a criminal enterprise'
WHISTLEBLOWER MAKES DAMNING CASE IN VIDEO INTERVIEW
The global banking giant HSBC is a "criminal" operation, charges a former officer for the company’s southern New York region in a video interview with WND.
John Cruz, a former vice president and relationship manager, has turned over to WND more than 1,000 pages of documents, including customer account ledgers for dozens of companies through which, he charges, the financial institution was laundering money each month.
God's last warning. 2012 is economic collapse & WW III www.the-end.com
Cruz told WND that as a relationship manager, it was his responsibility to look up various accounts in the HSBC computer system and visit the account holders in person to offer additional banking products and services…
and....
Germany's Roadmap For A Greek Return To The Drachma
Submitted by Tyler Durden on 05/09/2012 12:20 -0400
There has been much speculation about how the Greek endgame will play out, but precious little from the perspective of Germany. Until today. Courtesy of a three part series from Handeslblatt (here, here and here) we now know precisely what the next steps are as visualized by Europe's piggybank, which now is telegraphing it is set to cut Europe's most wayward child loose.
Step-by-step summary:
- Greece cannot stand by the spending cuts expected by the Troika. €11.5 Bn until June
- The creditors refuse the payment of the next tranche.Greece must pay €30 Bn until the end of June, to pay pensions, civil servants salaries, and support its ailing banking sector.
- Greece cannot service its debt anymore. Which means essentially service its debt to debtors like banks, bringing its banking sector to a likely bankruptcy (remember Greek banks were already hardly met by the €80 Bn PSI in March, 2 big Greek banks already have negative equity).
- Greece must save its banks to avoid a bank run. There will be no other way than reintroducing the Drachma since no one will lend them money, IMF or EU.
- Greece gets out of the Euro and reintroduces Drachma. "It wouldn’t be that easy since to avoid panic and a bank run, a banking holiday (perhaps a week) would be necessary.Even with capital controls with foreign contries, the process would remain technically difficult. For the Greeks this would mean serious consequences as loans would see the value drop and prices would go up. On the short term, the competitiveness of the country would improve. According to economists, a 50% depreciation would be necessary. That would, at least theoretically, mean that holidays in Greece would be substantially cheaper. It can still be doubted that Greece would solve its problems its way. Who wants to spend there its holidays , where unrest and chaos reign. “Greece could earn air to breath on the short term. This would change nothing to its problems on the longer term”, Commerzbank economist Christoph Weil says."
* * *
and.........
The Pain In Spain Is Mainly, Well, Everywhere
Submitted by Tyler Durden on 05/09/2012 09:32 -0400
From Peter Tchir of TF Market Advisors
The Pain In Spain Is Mainly, Well, Everywhere
Spain.
Spain.
Spain.
The reality is Greece is largely noise. Greece will eventually leave the Eurozone, but not this month. The hardliners inside Greece will realize they need some time to organize. The markets will have spooked the hardliners outside of Greece that they should play nice for a little bit, because forcing Greece out now won’t do them any good whatsoever.
With Greece largely a sideshow at this stage, the attention is really focused on Spain and Italy. The fact that Greece might lead the way out of the Euro is having a big impact on these countries. That realization combined with the already obvious problems at the sovereign and bank level caused markets to sell off. The Spanish 10 year bond is back above 6%, dropping 20 bps today, which is a significant move. As we wrote about last Friday, there are no natural buyers, so this move occurred in an illiquid market. There is more room to run, but moves in Spanish and Italian bonds are already starting to have a less direct impact on stocks than they did earlier in the morning.
I don’t think we will see a serious rebound in Spanish and Italian yields until the ECB intervenes. They will need to step up and draw a proverbial line in the sand. My guess is that won’t occur until 6.25% on the Spanish 10 year. Once they do step in, watch out a big gap better on the bonds. Just as there are no natural buyers, there will be no natural sellers. The shorts will want to cover. No one who is short is going to want to fight the ECB, at least not on their first day of purchases, so they will become buyers themselves. The dealers will sell what little inventory they have to the ECB and will do everything they can to drive up prices and get the best execution possible on their small positions. No Spanish or Italian bank is going to sell their inventory for a loss. They might not be adding, but they sure as heck aren’t selling.
The first hint of ECB purchases will be a major “risk on” signal. I don’t think we get it yet, but once we get actual purchases, or even a good rumor of purchases, I would expect 10 year bonds to gap up a point, CDS to tighten by 30 bps or more, and stocks in Spain to do a quick 2% bounce. It will happen quickly, but I really think the ECB has too many skeletons of its own making to jump in just yet. A bit more pain in the bond markets is still coming, but it will have less of a knock-on effect on stocks than the gap to 6% had.
and Troika plays ming games with Greek pols.....
Things In Europe Just Getting Worse By The Minute
Submitted by Tyler Durden on 05/09/2012 10:15 -0400
The latest out of the doomed continent:
- EURO ZONE DEBATING DELAY OF EUR5.2B MAY 10 PAYMENT TO GREECE - DOW JONES
- SOME GOVERNMENTS CONCERNED ABOUT MAKING A PAYMENT TO GREECE AMID POLITICAL TURMOIL
And so the check bounces, which is ironic, because as we repeatedly explained, the Greek bailout is not about Greece: it is merely to allow Europe to bailout its banks via ECB and Troika funded interest payments and using Greece as a passthru vehicle. Luckily, that particularly aggravating farce may soon be ending.
end
Then at 1:30 we were told that the entire 5.2 billion euros would be paid:
13:28 EFSF fund agrees to pay out €5.2B of next tranche to Greece- Reuters, citing source
Recall earlier reports that the Eurozone debating delay of €5.2B 10-May payment to Greece * * * * *
and then the farce continues:
one hour later the eurozone stated that it would hold back 1 billion euros. The holdback of the one billion euros means that Greece will not pay the Norwegian sovereign wealth fund it's 450 million of English written Greek bonds. A second round of popcorn anyone?
(zero hedge)
Eurozone Refuses To Blink: Will Hold Back €1 Billion From Greek Payment To Monday
Submitted by Tyler Durden on 05/09/2012 14:22 -0400
Things are getting interesting. Despite earlier headlines that the €5.2 billion EFSF payment to Greece would be made as expected, money which would go to pay European banks and the ECB, it now seems there is more than meets the eye, and the Eurozone will in fact hold back €1 billion of the money until Monday in what is a major escalation in the relationship between the anarchy-controlled country and bankster oligarchy.
- EUROZONE HOLDS BACK €1 BILLION FOR GREECE TO MONDAY ACCORDING TO A EUROPEAN SOURCE -Dow Jones
- EFSF SAYS 4.2 BLN EURO TO BE DISBURSED MAY 10 - BBG
- EFSF SAYS REMAINING FUNDS 1 BLN EURO NOT NEEDED BEFORE JUNE - BBG
- EFSF SAYS REMAINING 1 BLN EURO DISBURSED DEPENDING GREECE NEEDS - BBG
Why is this an issue? Because net of the payment due TO the ECB, the payment that Zero Hedge pointed out first on May 15 to non-PSI compliant bondholders may very well not be made, unleashing total chaos as to what happenx next:
If Greece were not to get the money, it would face financing problems because of a lack of cash for salaries as well as money for the redemption of 435 million euros of a bond maturing on May 15, a bond that was not fully swapped into new paper under the Greek debt restructuring deal finalized last month.
Somewhere Tim Geithner, whose "plan" this latest farce is, is cackling for now. Soon, he will be crying.
and.....
Europe's Stigmatized Banks On The Verge Of Crucifixion
Submitted by Tyler Durden on 05/09/2012 10:35 -0400
Back in the middle of March, when all was sunshine and unicorns in the post-LTRO world of recovery and another sustainable recovery, we were vociferous in our noting that nothing has been fixed and LTRO3 is not coming. Sure enough, here we are a few weeks later and the encumbering stigma that we were the first to point out (and call Draghi out on) is now wider than at any time since the LTRO program began with the banks that took LTRO loans now trading wide of pre-LTRO levels (fully stigmatized despite all that extra liquidity). Today saw the Stigma spread between LTRO and non-LTRO banks jump its most in 2 months to over 160bps (its highest in almost six months). There is however a troubling conundrum facing the ECB. The banks that need another LTRO (or liquidity) no longer have performing collateral to pledge and other banks that would like liquidity will not take it since they now understand the encumbrance and stigma that is attached to that decision. The ECB is snookered (and so is it any wonder that Draghi is playing for time) and perhaps this is why we are seeing the EUR leak lower against the USD as markets anticipate some more direct monetization mandate-busting action by the ECB (shifting the Fed/ECB balance and implicitly the flow between the two that we have also pointed out as critical). Either way, there is no LTRO3 coming anytime soon and together with this morning's jumps in liquidity funding costs, the vicious circles are ramping up again in Europe.
The LTRO Stigma jumped the most in over two months today (lower pane) and reaches up to near six-month highs - almost entirely removing any LTRO benefit completely...money well spent it seems...
And LTRO-encumbered banks are at their widest since LTRO began - while those that chose the tougher path of self-reliance remain considerably better rated by the market...
Our LTRO Stigma has proved to be one of the clearest ways to show the stress in Europe as we echo our thoughts from 2 months ago:
When one understands that the heart of Europe's problem is the rapid "vaporization" of all money good assets, everything falls into place: from the ECB's response, to Europe's propensity for infinite rehypothecation, to the rapidly deteriorating financial system.
Only this time there can be no quick collateral-type response as money-good assets are few and far between. We suspect it won't be long before the Fed comes to their rescue with extensions of the FX swap lines - but just how much of that ECB balance sheet does the Fed really want to take on as collateral when it is also nothing more than a giant CDO balanced on the dross assets of Europe's banking system (especially when one considers that ECB margin calls remain negligible in the face of asset impairments everywhere).
Here are today's closing yields on the Spanish bond finishing the day with a yield of 6.08%
The Italian bond yield finished at 5.60%
Spanish 10 yr bond yield:
SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE
Add to Portfolio
GSPG10YR:IND
6.078000.23500 4.02%
As of 12:00:00 ET on 05/09/2012.
and for comparison purposes:
ITALY GOVT BONDS 10 YEAR GROSS YIELD
Add to Portfolio
GBTPGR10:IND
5.597000.14300 2.62%
As of 11:59:00 ET on 05/09/2012.
and.....
Rumours today from France:
06:26 European Market Rumor: Credit Immobilier de France is facing "troubles". Trading in some of their bonds has been suspended at electronic trading plateforms -- Mediapart (as of 08-May)
Mediapart reports the French regulator AMF has asked for the suspension in trading of some CIF bonds and declined to give justify the move.
CIF is a specialist lender to the housing market within France only
(courtesy WND)
WND EXCLUSIVE
Banking giant HSBC 'a criminal enterprise'WHISTLEBLOWER MAKES DAMNING CASE IN VIDEO INTERVIEW
The global banking giant HSBC is a "criminal" operation, charges a former officer for the company’s southern New York region in a video interview with WND.John Cruz, a former vice president and relationship manager, has turned over to WND more than 1,000 pages of documents, including customer account ledgers for dozens of companies through which, he charges, the financial institution was laundering money each month.
God's last warning. 2012 is economic collapse & WW III www.the-end.com
Cruz told WND that as a relationship manager, it was his responsibility to look up various accounts in the HSBC computer system and visit the account holders in person to offer additional banking products and services…
and....
Germany's Roadmap For A Greek Return To The Drachma
There has been much speculation about how the Greek endgame will play out, but precious little from the perspective of Germany. Until today. Courtesy of a three part series from Handeslblatt (here, here and here) we now know precisely what the next steps are as visualized by Europe's piggybank, which now is telegraphing it is set to cut Europe's most wayward child loose.
Step-by-step summary:
- Greece cannot stand by the spending cuts expected by the Troika. €11.5 Bn until June
- The creditors refuse the payment of the next tranche.Greece must pay €30 Bn until the end of June, to pay pensions, civil servants salaries, and support its ailing banking sector.
- Greece cannot service its debt anymore. Which means essentially service its debt to debtors like banks, bringing its banking sector to a likely bankruptcy (remember Greek banks were already hardly met by the €80 Bn PSI in March, 2 big Greek banks already have negative equity).
- Greece must save its banks to avoid a bank run. There will be no other way than reintroducing the Drachma since no one will lend them money, IMF or EU.
- Greece gets out of the Euro and reintroduces Drachma. "It wouldn’t be that easy since to avoid panic and a bank run, a banking holiday (perhaps a week) would be necessary.Even with capital controls with foreign contries, the process would remain technically difficult. For the Greeks this would mean serious consequences as loans would see the value drop and prices would go up. On the short term, the competitiveness of the country would improve. According to economists, a 50% depreciation would be necessary. That would, at least theoretically, mean that holidays in Greece would be substantially cheaper. It can still be doubted that Greece would solve its problems its way. Who wants to spend there its holidays , where unrest and chaos reign. “Greece could earn air to breath on the short term. This would change nothing to its problems on the longer term”, Commerzbank economist Christoph Weil says."
* * *
and.........
The Pain In Spain Is Mainly, Well, Everywhere
From Peter Tchir of TF Market Advisors
The Pain In Spain Is Mainly, Well, Everywhere
Spain.
Spain.
Spain.
The reality is Greece is largely noise. Greece will eventually leave the Eurozone, but not this month. The hardliners inside Greece will realize they need some time to organize. The markets will have spooked the hardliners outside of Greece that they should play nice for a little bit, because forcing Greece out now won’t do them any good whatsoever.
With Greece largely a sideshow at this stage, the attention is really focused on Spain and Italy. The fact that Greece might lead the way out of the Euro is having a big impact on these countries. That realization combined with the already obvious problems at the sovereign and bank level caused markets to sell off. The Spanish 10 year bond is back above 6%, dropping 20 bps today, which is a significant move. As we wrote about last Friday, there are no natural buyers, so this move occurred in an illiquid market. There is more room to run, but moves in Spanish and Italian bonds are already starting to have a less direct impact on stocks than they did earlier in the morning.
I don’t think we will see a serious rebound in Spanish and Italian yields until the ECB intervenes. They will need to step up and draw a proverbial line in the sand. My guess is that won’t occur until 6.25% on the Spanish 10 year. Once they do step in, watch out a big gap better on the bonds. Just as there are no natural buyers, there will be no natural sellers. The shorts will want to cover. No one who is short is going to want to fight the ECB, at least not on their first day of purchases, so they will become buyers themselves. The dealers will sell what little inventory they have to the ECB and will do everything they can to drive up prices and get the best execution possible on their small positions. No Spanish or Italian bank is going to sell their inventory for a loss. They might not be adding, but they sure as heck aren’t selling.
The first hint of ECB purchases will be a major “risk on” signal. I don’t think we get it yet, but once we get actual purchases, or even a good rumor of purchases, I would expect 10 year bonds to gap up a point, CDS to tighten by 30 bps or more, and stocks in Spain to do a quick 2% bounce. It will happen quickly, but I really think the ECB has too many skeletons of its own making to jump in just yet. A bit more pain in the bond markets is still coming, but it will have less of a knock-on effect on stocks than the gap to 6% had.
and Troika plays ming games with Greek pols.....
Things In Europe Just Getting Worse By The Minute
The latest out of the doomed continent:
- EURO ZONE DEBATING DELAY OF EUR5.2B MAY 10 PAYMENT TO GREECE - DOW JONES
- SOME GOVERNMENTS CONCERNED ABOUT MAKING A PAYMENT TO GREECE AMID POLITICAL TURMOIL
And so the check bounces, which is ironic, because as we repeatedly explained, the Greek bailout is not about Greece: it is merely to allow Europe to bailout its banks via ECB and Troika funded interest payments and using Greece as a passthru vehicle. Luckily, that particularly aggravating farce may soon be ending.
end
Then at 1:30 we were told that the entire 5.2 billion euros would be paid:
Recall earlier reports that the Eurozone debating delay of €5.2B 10-May payment to Greece * * * * *
and then the farce continues:
Submitted by Tyler Durden on 05/09/2012 14:22 -0400
one hour later the eurozone stated that it would hold back 1 billion euros. The holdback of the one billion euros means that Greece will not pay the Norwegian sovereign wealth fund it's 450 million of English written Greek bonds. A second round of popcorn anyone?
(zero hedge)
Eurozone Refuses To Blink: Will Hold Back €1 Billion From Greek Payment To Monday
Things are getting interesting. Despite earlier headlines that the €5.2 billion EFSF payment to Greece would be made as expected, money which would go to pay European banks and the ECB, it now seems there is more than meets the eye, and the Eurozone will in fact hold back €1 billion of the money until Monday in what is a major escalation in the relationship between the anarchy-controlled country and bankster oligarchy.
- EUROZONE HOLDS BACK €1 BILLION FOR GREECE TO MONDAY ACCORDING TO A EUROPEAN SOURCE -Dow Jones
- EFSF SAYS 4.2 BLN EURO TO BE DISBURSED MAY 10 - BBG
- EFSF SAYS REMAINING FUNDS 1 BLN EURO NOT NEEDED BEFORE JUNE - BBG
- EFSF SAYS REMAINING 1 BLN EURO DISBURSED DEPENDING GREECE NEEDS - BBG
Why is this an issue? Because net of the payment due TO the ECB, the payment that Zero Hedge pointed out first on May 15 to non-PSI compliant bondholders may very well not be made, unleashing total chaos as to what happenx next:
If Greece were not to get the money, it would face financing problems because of a lack of cash for salaries as well as money for the redemption of 435 million euros of a bond maturing on May 15, a bond that was not fully swapped into new paper under the Greek debt restructuring deal finalized last month.
Somewhere Tim Geithner, whose "plan" this latest farce is, is cackling for now. Soon, he will be crying.
and.....
Europe's Stigmatized Banks On The Verge Of Crucifixion
Back in the middle of March, when all was sunshine and unicorns in the post-LTRO world of recovery and another sustainable recovery, we were vociferous in our noting that nothing has been fixed and LTRO3 is not coming. Sure enough, here we are a few weeks later and the encumbering stigma that we were the first to point out (and call Draghi out on) is now wider than at any time since the LTRO program began with the banks that took LTRO loans now trading wide of pre-LTRO levels (fully stigmatized despite all that extra liquidity). Today saw the Stigma spread between LTRO and non-LTRO banks jump its most in 2 months to over 160bps (its highest in almost six months). There is however a troubling conundrum facing the ECB. The banks that need another LTRO (or liquidity) no longer have performing collateral to pledge and other banks that would like liquidity will not take it since they now understand the encumbrance and stigma that is attached to that decision. The ECB is snookered (and so is it any wonder that Draghi is playing for time) and perhaps this is why we are seeing the EUR leak lower against the USD as markets anticipate some more direct monetization mandate-busting action by the ECB (shifting the Fed/ECB balance and implicitly the flow between the two that we have also pointed out as critical). Either way, there is no LTRO3 coming anytime soon and together with this morning's jumps in liquidity funding costs, the vicious circles are ramping up again in Europe.
The LTRO Stigma jumped the most in over two months today (lower pane) and reaches up to near six-month highs - almost entirely removing any LTRO benefit completely...money well spent it seems...
And LTRO-encumbered banks are at their widest since LTRO began - while those that chose the tougher path of self-reliance remain considerably better rated by the market...
Our LTRO Stigma has proved to be one of the clearest ways to show the stress in Europe as we echo our thoughts from 2 months ago:
When one understands that the heart of Europe's problem is the rapid "vaporization" of all money good assets, everything falls into place: from the ECB's response, to Europe's propensity for infinite rehypothecation, to the rapidly deteriorating financial system.
Only this time there can be no quick collateral-type response as money-good assets are few and far between. We suspect it won't be long before the Fed comes to their rescue with extensions of the FX swap lines - but just how much of that ECB balance sheet does the Fed really want to take on as collateral when it is also nothing more than a giant CDO balanced on the dross assets of Europe's banking system (especially when one considers that ECB margin calls remain negligible in the face of asset impairments everywhere).
Here are today's closing yields on the Spanish bond finishing the day with a yield of 6.08%
The Italian bond yield finished at 5.60%
Spanish 10 yr bond yield:
SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE
Add to PortfolioGSPG10YR:IND
6.078000.23500 4.02%
As of 12:00:00 ET on 05/09/2012.
and for comparison purposes:
ITALY GOVT BONDS 10 YEAR GROSS YIELD
Add to PortfolioGBTPGR10:IND
5.597000.14300 2.62%
As of 11:59:00 ET on 05/09/2012.
and.....
Rumours today from France:
Mediapart reports the French regulator AMF has asked for the suspension in trading of some CIF bonds and declined to give justify the move.
CIF is a specialist lender to the housing market within France only
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