Posts by "catnip"

First of all gold is bought because PBOC has put no brakes on inflation. Some say PBOC has hired Greenspan not as consultant, but as chief strategist. Eurozone for the time being is out of focus.
Focus will immediately return if something in Dubai turns sour.

from CNN
Trading of U.S. credit default swap contracts has more than doubled in recent weeks. Prices have also risen as more investors take out insurance on U.S. debt.
In the past year, a growing number of investors are buying what's known as credit default swaps on AAA-rated nations like the U.S., U.K. and Germany. There has been a 75% increase in activity in the U.S. debt market alone.

Billions of dollars in AAA-rated sovereign debt are now packaged in the CDS market. The growing interest in these products highlights a notable, but small, number of investors who feel the need to protect themselves financially from even the low possibility that the U.S. could default on its debt.

Massive bets on credit default swaps, and similar alphabet soup-like derivatives in the wake of the subprime mortgage meltdown, are one of the reasons why banks like Lehman Brothers and insurance company AIG (AIG, Fortune 500) imploded.

Since the European debt crisis began more than a year ago, interest in credit-default swaps has been on the rise again. This time, the swaps are being written not on residential mortgages and the financial firms with ties to them, but on the debt of countries.

Critics fear these instruments could be used by speculators to attack fiscally challenged governments.

For now, the market for U.S. CDS products is relatively small and illiquid. But it's growing. Data provided by the Depository Trust and Clearing Corporation, a clearinghouse of over-the-counter products, shows 678 CDS contracts trade on U.S. debt, up from 392 contracts a year ago.

Yes but this time the market believes merkel is infinitely stupid she bails out each and everything.
EFSF financing is not at all a done thing... but at the moment no one cares. However it is advisable
to set stop sell below 1355 just in case.

it has only a 1% coupon thus that is what drives Eur expectation of rate hike

Aussie dips a bit