Much of Europe in sad shape

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http://www.bloomberg.com/apps/news?pid=20602095&sid=abyuK6ASd.T0&refer=govt_bonds
Quote:
Greek Downgrade Triggers Surge in European Government Debt Risk
Jan. 14 (Bloomberg) -- The cost of hedging against losses on European government bonds jumped as Standard & Poor’s cut Greece’s credit rating after threatening to downgrade Ireland, Portugal and Spain.

Credit-default swaps tied to Greek debt jumped 18 basis points to 250 after S&P lowered its long-term grade one step to A-, according to CMA Datavision prices at 2:45 p.m. in London. Contracts on governments throughout Europe rose.

“The ongoing global financial and economic crisis has, in our opinion, exacerbated an underlying loss of competitiveness in the Greek economy,” S&P analyst Marko Mrsnik said in a statement today.

Quote:
“The peripheral countries are coming under pressure,” said Ian Stannard, a currency strategist at BNP Paribas SA in London. “Given the huge supply of bonds that’s due, this is going to make things more tricky. It’s going to leave the euro extremely vulnerable.”

Quote:
Greece was put on watch for a possible cut by S&P on Jan. 9 as sliding support for the government hampers the country’s ability to ride out the economic crisis. The same day, the ratings firm lowered the outlook for Ireland’s debt to “negative” from “stable.”

Portugal yesterday became the third euro nation in a week to be threatened with a debt downgrade when S&P’s said the country’s long-term rating may be lowered from AA-. Spain faces “significant challenges” and may have its top AAA rating lowered, the ratings firm said Jan. 12.

Quote:
There is an “increasing disparity and deterioration in the quality of European sovereigns,” Emma Lawson, a currency strategist in London at Merrill Lynch, wrote in a report yesterday.

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Spanish Finance Minister Pedro Solbes said Jan. 13 that the country’s budget deficit will “substantially” exceed the European Union’s limit of 3 percent of GDP this year.

Europe’s downturn may take the biggest toll on countries already saddled by debt. Italy’s burden rose to 109 percent of gross domestic product in October, the highest in the euro region, and the International Monetary Fund in Washington estimates that will limit Prime Minister Silvio Berlusconi’s ability to revive the economy.

No wonder people are buying up US treasuries.
 
I just finished reading Peter Schiff's book Crash Proof, written in 2006. He recommends foreign investment as well as gold. And although he did get the impending crash correct, I think he was wrong about foreign investment as a safe haven. Or at least it appears that way.
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Not so sure about the gold recommendation, although it's increased in value since 2006.
 
Quote:
Not so sure about the gold recommendation, although it's increased in value since 2006.



It may end up being a bargain in the future.

Quote:
I think he was wrong about foreign investment as a safe haven.


He may be ..but that's viewed from NOW. We don't know how this will shake out as the depression takes hold in real effects. Right now we're still riding on residuals and leftovers. Once we're down to vapor crumbs ..
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Everybody thought he was crazy back in 2006. Now, they want to know what crystal ball he was looking into...

The other thing he predicted was the dollar losing SIGNIFICANT value (upwards of 50%) at the time of the market destabilization. I hope that isn't a sign of things to come.
 
Originally Posted By: Tempest
No wonder people are buying up US treasuries.


Are you doing that?
crackmeup2.gif
 
I don't think he's any genius. He's just the guy who was the first (and did it very late) to point out that there was an elephant in the room.

Lots of people saw it ..and just went ahead and migrated with the herd anyway for fear of not getting their portion of the grab bag.
 
Gary,

The tone of Schiff's book was annoying at times. A bit conspiracy-laced and a bit smug ... the smugness was more from his new book. And he claims he's not being arrogant, but simply building credibility.
 
Originally Posted By: Tempest

No wonder people are buying up US treasuries.

What's the appeal, considering these gains will be eaten by inflation?

Code:
January 2009

Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr

01/02/09 0.04 0.08 0.28 0.40 0.88 1.14 1.72 2.07 2.46 3.22 2.83

01/05/09 0.05 0.14 0.32 0.43 0.78 1.08 1.67 2.07 2.49 3.37 3.00

01/06/09 0.05 0.14 0.31 0.45 0.80 1.10 1.68 2.07 2.51 3.41 3.04

01/07/09 0.03 0.11 0.29 0.44 0.82 1.15 1.66 2.02 2.52 3.41 3.05

01/08/09 0.04 0.09 0.28 0.44 0.83 1.16 1.60 1.95 2.47 3.40 3.04

01/09/09 0.03 0.07 0.28 0.43 0.75 1.11 1.51 1.88 2.43 3.39 3.04

01/12/09 0.04 0.12 0.29 0.43 0.74 1.09 1.45 1.81 2.34 3.30 2.99

01/13/09 0.02 0.11 0.29 0.43 0.76 1.07 1.44 1.80 2.33 3.30 3.00

01/14/09 0.07 0.12 0.28 0.42 0.73 1.03 1.36 1.71 2.24 3.17 2.89

01/15/09 0.03 0.11 0.29 0.42 0.73 1.01 1.36 1.71 2.23 3.16 2.86

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml
 
Well, I hope that he was smug and insulting in a Gary Allan way
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Now I haven't (obviously) read his book, but I too have to lean toward a conspiracy (or collusion) type event. This worked out too well ..in a bad way.

A coup that had all the westernized/capitalist contours of an regime overthrow of some banana republic.

Who's your daddy?
 
Aren't you glad you didn't buy notes from Zimbabwe? Something like $5,000,000,000 units (whatever the heck they are) to buy a loaf of bread now that used to cost $1 unit.
 
Last edited:
Originally Posted By: NJC
Originally Posted By: Tempest

No wonder people are buying up US treasuries.

What's the appeal, considering these gains will be eaten by inflation?



The appeal is bank default risk is greater than government default risk. And FDIC only guarantees that you'll get your money back within 30 years. How's that for keeping your money safe?
 
Originally Posted By: VeeDubb
NJC said:
FDIC only guarantees that you'll get your money back within 30 years. How's that for keeping your money safe?


Ask Steve S what might happen within 30 years.
34617wz.jpg
 
Originally Posted By: moribundman
Originally Posted By: VeeDubb
NJC said:
FDIC only guarantees that you'll get your money back within 30 years. How's that for keeping your money safe?


Ask Steve S what might happen within 30 years.
34617wz.jpg





OK, I give up. What's going to happen Steve S?
 
Originally Posted By: VeeDubb
Originally Posted By: NJC
Originally Posted By: Tempest

No wonder people are buying up US treasuries.

What's the appeal, considering these gains will be eaten by inflation?



The appeal is bank default risk is greater than government default risk. And FDIC only guarantees that you'll get your money back within 30 years. How's that for keeping your money safe?

AND our government/economy/credit rating is looking much more stable and secure than most other countries at the moment.
 
The poker always appears to be on top if all they leave is pokee's in their wake. Don't you agree?

..most massive brilliant coup in all of known history.
 
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