Credit To Insulate The Banking

(Reuters) - Greece's tortuous debt restructuring and threat of retroactive laws to compel reluctant creditors heaps regulatory risk onto investors but may make voluntary sovereign debt revamps more attractive and likely for other cash-strapped euro sovereigns and their creditors. Thursday could mark a climax of the Greek debt workout with private creditors due to respond to an offer that would see them effectively write off more than 70 percent of the face value of their bonds in return for new debt with a series of sweeteners. With Greek government bonds currently trading at less than 20 cents in the euro and the risk of a total wipeout if Greece decided to unilaterally refuse all payments, a majority will likely go for it. Legally-binding majorities are another matter. Athens said ...

(Reuters) - Gold prices rose 1.5 percent on Tuesday for their biggest daily gain in two weeks, as expectations that a Greek rescue deal will be completed drove the dollar down sharply against the euro. Bullion, which had dropped in early trade on nervousness about Greece, rebounded to snap two days of losses as Greece's government was preparing a list of reforms needed to clinch a new financing package. Hopes for a bailout plan that would move Athens closer to avoiding a chaotic debt default boosted gold's inflation-hedge appeal. The metal's rally also sharply outpaced Wall Street's gains. "If the deal falls apart, the ECB (European Central Bank) is going to be even more aggressive in monetizing things and create credit to insulate the banking system from a disorganized default," said ...

(Reuters) - Gold prices rose 1.5 percent on Tuesday as expectations that a Greek rescue deal will be completed drove the dollar down sharply against the euro. Bullion, which had dropped in early trade on nervousness about Greece, rebounded and headed for its biggest daily gain in two weeks as Greece's government was preparing a list of reforms needed to clinch a new financing package. Hopes for a bailout plan that would move Athens closer to avoiding a chaotic debt default boosted gold's inflation-hedge appeal. "If the deal falls apart, the ECB is going to be even more aggressive in monetizing things and create credit to insulate the banking system from a disorganized default," said James Dailey, portfolio manager of the TEAM Asset Strategy Fund. "It's basically a win-win for gold at ...

(Reuters) - Gold prices rose 1 percent on Tuesday as expectations that a Greek rescue deal will be completed drove the dollar down sharply against the euro. Bullion, which had dropped in early trade on nervousness about Greece, bounced and was on track for its biggest daily gain in two weeks as Greece's government was preparing a list of reforms needed to clinch a new financing package. Hopes for a bailout plan that would move Athens closer to avoiding a chaotic debt default boosted gold's inflation-hedge appeal. "If the deal falls apart, the ECB is going to be even more aggressive in monetizing things and create credit to insulate the banking system from a disorganized default," said James Dailey, portfolio manager of the TEAM Asset Strategy Fund. "It's basically a win-win for gold at ...

(Reuters) - Extremely volatile trade on European stock and currency markets on Friday reflected doubts about the outcome of a crunch EU summit after leaders agreed stricter budget rules but made little other progress in the first round of meetings overnight. After 10 hours of talks among the EU's 27 member nations, all 17 euro zone countries and six others that aspire to join the group resolved to negotiate a new agreement alongside the EU treaty, with a tougher deficit and debt regime to insulate the euro zone against the debt crisis. The split that left Britain out of that deal - and signs of a lack of progress on immediate measures to ease pressure on government bond markets - unnerved investors to send the single currency and stocks initially lower. But sentiment soon turned more ...

€ The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3125 level and was capped around the $1.3185 level. Technically, today’s intraday low was right around the 38.2% retracement of the $1.5140 – 1.1875 range. Australasian dealers pushed the common currency lower overnight on a report the European Central Bank has “serious concerns” about proposed Irish legislation regarding the country’s banking system. There is speculation the new law, if passed, would inhibit the ECB’s ability to execute its liquidity operations. The common currency was also pressured lower on a report that troubled Irish banking giant Allied Irish Banks may be nationalized. Traders also pushed the common currency lower in anticipation of U.S. economic data ...

On Friday, October 15, 2010, Federal Reserve Chairman Ben S. Bernanke delivered a dishonest speech: “Monetary Policy Tools and Objectives in a Low-Inflation Environment.” What follows is not a critique of the talk, since that would be redundant. Please see one of my recent articles “Exploiting Bernanke” (September 21, 2010), which discussed the anticipated speech of October 15, 2010. Also see, “Central Bankers are Paid to Lie – Buy Corn” (October 5, 2010), which showed how Federal Reserve Chairman Arthur Burns fibbed his way through the 1970s. Investors who either believed him or were not adept at translating signals from the real world suffered. Bernanke’s mendacious speech confirmed my general investment advice in “Central Bankers are Paid to Lie”: “Courses of protection include buying ...