Posts by "stationdealer"

Although Greece can no longer refinance their debt any time soon or for a long time. But Greek banks can tap into the ECB's allotted E31.603 Bln in a 28-Day refis at Fixed Rate Of 1.00% enough for Greece's finances to temporary stay float. Its a day to day struggle with Greece we see and if the Greek are not re structuring as fast as needed this junk bond push has a risk to spread to other PIIGS nations.

But same time with as ever hurting bond market looks for a safe haven to holds its debt under, its wont be the Dollar with their deficits soaring or Yen with a deflation going on who know what drastic steps they might take in a sigh of desperation, and Uk with still no resolve for their imbalanced economy. So from all these uncertainties Euro will some how have a little respite and rates will hold up or giving Euro an edge over other currencies as soon Banks will start talking about OK Europe Did What Was Needed and lets draw some money under ECB's belt. I mean Banks will move where the least possible risk will remain in case another crisis arise in future say in US, Japan or UK. They are never interested in temporary or permanent global solution, they only and always have worked day to day just to find & cease an opportunity and make a killing for themselves.





Pressures only remain economical but uncertainties are merely just political.

Feds Bullard: Global Recovery Looks Very Strong, Unlikely To Be Derailed By Euro Zone Crisis

Volatile Asian equity prices should not be seen as signal of trouble ahead
Rapid Chinese growth consistent with fundamentals, not a bubble
Risk of sudden slowdown in China derailing global recovery is limited
Expects US GDP to be back at pre-crisis level in Q3
US firms will likely have to hire workers in remainder of 2010 to keep up with demand
US market stress from Europe more reflection of worry than reality of global slowdown prospects
Europes debt situation serious, unclear how will unfold
Effect of flight to safety in US is like aggressive, successful monetary policy action
Expect market concerns about Europe to remain for months, possibly years
Worry about bank losses overstated because govts will bail out banks

Bullards bullish comments regarding global recovery will have helped lift risk sentiment a little further. EUR/USD is at session high 1.2255 at writing.

The fact of the matter is that it was the decision to tighten credit policy in 1928 that produced the Great Contraction interest rate hikes had been undertaken in 1928 to curb what the Fed saw as rampant speculation on Wall Streeta conflagration of leveraging, margin buying, and outright Ponzi scheming fueled by cheap credit that was supplied in the first instance by the Federal Reserve. (Goldman Sachs' pyramid schemes of the era, when they collapsed, would generate losses of $475 billion in today's dollars.) Federal Reserve had needlessly constricted the money supply and thereby crashed an otherwise prosperous economy.

After the Great Crash of 1929, the Federal Reserve drastically cut interest rates; but, on occasion, the Fed was forced to abruptly raise them again in complicated maneuvers to stem outflows of gold into Europe. Then these sporadic interest rate hikes for smothering several incipient recoveries, opening a vortex of deflation, and turning a recession into the Great Depression.

In reality, Bernanke is following the monetarist depression-prevention model hatched by Nobel laureate and libertarian patron saint Milton Friedman. Bernanke has repeatedly invoked the late libertarian economist in support of lowering interest rates to zero, bailing out banks, and pumping untold trillions of dollars into the financial system. The implicit goal of these policies is to ignite artificial inflation. The story begins in 1963, when Friedman and co-author Anna Schwartz published The Monetary History of the United States. Their chapter on the Great Depression was spun off into a standalone book, The Great Contraction: 1929-1933, an epic revisionist history that changed America's understanding of the causes of the Depression.

Which brings us back to the question of Ben Bernanke's economic ideology. When it comes to the Great Depression, Bernanke is a disciple of Friedman and Schwartz. In 2002, at Friedman's 90th birthday party at the University of Chicago, Bernanke was effusive. "Among economic scholars," he began, "Friedman has no peers." He developed the "leading and most persuasive" explanation of the Depression, whose impact on economics and the popular mind "cannot be overstated."

At the conclusion of his encomium, Bernanke made a stunning and ominous apology on behalf of the Federal Reserve. "I would like to say to Milton and Anna...regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

Schwartz was also present at the birthday party. "I'm sure he was sincere when he said that," she recalled. And Bernanke stayed true to his word. In 2006, he replaced Alan Greenspan as chairman of the Federal Reserve. Greenspan had engineered an era of non-inflationary loose credit that won Friedman's endorsement: "There is no other period of comparable length in which the Federal Reserve System has performed so well," Friedman declared in The Wall Street Journal.

When the economy collapsed two years into Bernanke's watch because of a massive credit bubble, Bernanke slashed interest rates to zero and ordered the money-printing presses to full steam. He also embarked on a course of "quantitative easing," whereby a central bank convolutedly buys its own government's bonds with printed money so as to sink interest rates even further.

This approach was nothing new. Friedman had recommended quantitative easing, combined with ultra-loose credit and inflation, as a panacea for Japan's slump in the 1990s, which he described as an "eerie, if less dramatic, replay of the Great Contraction." As he did with the Depression-era Fed, Friedman emphasized that, "There is no limit to the extent to which the Bank of Japan can increase the money supply if it wishes to do so." In 1998, a year after Friedman penned his advice in The Wall Street Journal, Japan introduced monetary stimulus: a cocktail of zero interest rates and quantitative easing. But deflation continued. Today, Japan's exports are down an unthinkable 36 percent from last year and prices are plummeting at an all-time record pace.

Stateside, in light of the Fed's multi-trillion dollar balance sheet, it has been all too easy to mistake Bernanke for a Keynesian supporter of public works projects, socialistic safety nets, and government-led consumption. And while it's true that the Obama administration is pursuing Keynesian fiscal stimulus, the Federal Reserve, as an independent, semi-private institution owned by America's banks and largely walled off from the executive and legislative branches, has developed its own agenda. That agenda is monetarist. Yet the media consistently gets this crucial fact wrong.

The New York Times, for instance, has identified Bernanke as "a student if not necessarily a devotee of the British economist John Maynard Keynes." But Bernanke actually spent most of his acade

BP is very big why would it need chapter 11, bankruptcy and default absolute loony. These king of things sound good in news paper rally support or to create an opinion but in reality we all know that will never happen.

But here found something interesting read this instead....http://www.theoildrum.com/node/6542

Early Optimism Fades To Black

Italian unions call for general strike this month
Bernanke: Growth continues to recovery at modest pace; European leaders attacking debt problems, impact on US to be modest; warns against rising debt
US wholesales inventories rise 0.4%, sales rise 0.7% in April
S&P: Conceivable US rating could be cut; UK rating to be decided after budget
Bubas Weber: I cant understand the skepticism on euro bailout; controlled sovereign bankruptcy still should be considered
Germany rejects Opels request for state aid; Merkel wants to protect workers
World Banks Zoellick suggests debt restructuring still an alternative in Europe
Portugal passes austerity package
S&Ps Beers says Greek default, euro zone break up not inevitable
US Beige Book: Growth in all 12 districts, most say growth modest
S&P sheds 1.4% intraday gains, closes 0.6% lower
US yields end near recent lows; 2-year 0.73%, 10-yr 3.18%

EUR/USD opened firm and added to gains after fears of a European-led double-dip recession faded after overnight reports that Chinese exports rose 50% last month. Stops were triggered in the 1.2010/30 region, again above 1.2050, leading to intraday highs of 1.2075.
Prices slipped lower throughout the afternoon as optimism faded amidst comments from officials (Weber and Zoellick) that bankruptcy/restructuring remain viable alternatives for states having trouble paying debts. Also weighing was a wishy-washy response from Chancellor Merkep on the Opel situation. Her government rejected state aid but she vowed to try and secure funds from the Lander to help Opel workers. Her indecision remains a major drag on Germans prestige and on the euro.

USD/JPY and EUR/JPY were sold heavily in the afternoon as US share prices reversed to the downside and bond yield fell. Stops below 91.25 were triggered taking the buck as low as 91.06. EUR/JPY was hammered by all of the above in EUR/USD as well as the US stock slide. It popped to 100.60earlier in the day on short-covering (stops were above 110.50) but it ends the day down at 109.35, a major disappointment to the momentum-types who bought the bounce, hoping for a bottom.

EUR/GBP remains weighed down amidst a return of risk aversion. Scattered talik that BP may be forced into bankruptcy did nothing to support the cross. Cable ends in the middle of its sessions range at 1.4535.

AUD/USD edged through its 61.8% fibo of the 0.8519/0.8085 decline at 0.8353 but stalled ahead of important resistance in the 0.8365/70 area. It topped at 0.8357.