Monday, 29 November 2010

Ireland Saved! Saved!!

Baltic Dry Index. 2200 -13
LIR Gold Target by 2019: $30,000. Revised.

I showed my appreciation of my native land in the usual Irish way, by getting out of it as soon as I possibly could.

George Bernard Shaw

Christmas came early for the Irish yesterday, when the Finance Ministers of the Land of Milk and Honey, meeting in Brussels, capital of Euroland, collectively agreed to bailout Ireland, so Ireland can bailout its banks, so its banks can repay their debts to Europe’s banks, so Europe’s banks can carry on pretending they’re not broke. The 4.2 million Irish were told that as a consequence for all this generosity and kindness, their benefits were to be cut, their taxes raised, and that two million of them should hit the emigration road, get jobs and start sending remittances home. Below, Bloomberg and the Irish Times cover the riches to rags story.

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

Ireland Wins EU85 Billion; Germany Drops Bond Threat

Nov. 29 (Bloomberg) -- European governments sought to quell the market turmoil menacing the euro, handing Ireland an 85 billion-euro ($113 billion) aid package and diluting proposals to force bondholders to bear some cost of future bailouts.

European finance chiefs ended crisis talks in Brussels yesterday by endorsing a Franco-German compromise on post-2013 rescues that means investors won’t automatically take losses to share the cost with taxpayers as German Chancellor Angela Merkel initially proposed to the consternation of bond traders.

The first test of the twin decisions came as markets resumed trading after speculation intensified last week that Portugal and perhaps even Spain will require support. German bunds, Europe’s benchmark, fell after the deals damped demand for the safest fixed-income assets. European stocks gained.

“We’ll maybe see some relief in markets, but governments need to show they’re getting their economies in shape,” said Axel Merk, president and chief investment officer of Merk Investments LLC in Palo Alto, California. “People are now going to focus on Portugal and it’s probably also going to need some help.”

Six months after the Greek rescue exposed flaws in the euro’s makeup and fueled doubts whether 16 countries belong in the same currency union, policy makers again found themselves meeting on a Sunday racing to calm markets. They convened after a week in which the cost of insuring Portuguese, Irish and Spanish government debt against default rose to a record and the 10-year bond yields of those nations, Italy and Greece averaged more than 7.5 percent, a euro-era record.

In a third move yesterday, Greece was told it could have an extra four-and-a-half years to repay emergency loans totaling 110 billion euros to match the seven-year term under Ireland’s deal.


Opposition condemns use of pension fund in €85bn bailout

Monday, November 29, 2010

THE €85 billion EU-IMF bailout package for Ireland announced last night was roundly condemned by the Opposition parties who are now all likely to vote against the Budget on December 7th.

Fine Gael, Labour and Sinn Féin attacked the intention to use the National Pension Reserve Fund to help provide a further €10 billion in further capital for the banks. In total, the banks could end up getting another €35 billion if their losses are bigger than expected.

The remaining €50 billion is to cover the State’s borrowing needs for the next three years. Opposition parties were highly critical of the 5.8 per cent average interest rate that will be charged by the EU and the International Monetary Fund.

A memorandum of understanding to give legal status to the agreement is near completion and will be published before the budget. It will give quarter-by-quarter targets which will have to be met by the Government in order for funds to be released.

Under the agreement the State will contribute €17.5 billion of the package from the National Pension Reserve Fund and cash held by the National Treasury Management Agency while the total external assistance in the fund will come to €67.5 billion. It is comprised of €45 billion from the EU, bilateral loans from Britain, Sweden and Denmark, and €22.5 billion from the IMF.

Britain will lend nearly €8 billion, including €4 billion in a direct bilateral loan. The British have won a major concession from EU partners, particularly the Germans, by ensuring the UK will not be automatically part of any euro-rescue packages after 2013.

Taoiseach Brian Cowen welcomed the fact that there would be no change to the corporation tax rate of 12.5 per cent which was vital to Ireland’s economic recovery.

Speaking at a press conference he said a large portion of the loans, some €50 billion, would go towards paying for social welfare payments, pensions, health and education “as we manage the transition to a sustainable deficit and debt position”.

He said the programme endorsed the proposed adjustment of €6 billion next year and €15 billion over the next four years, while recognising the timeframe for reducing the deficit to 3 per cent of GDP should be extended to 2015.

Minister for Finance Brian Lenihan said junior bank bondholders would face steep losses but made it clear that senior bondholders would not be hit.

As best I can see, this merely buys time to get into next year waiting for something to turn up. From sometime in late 2013, according to reports, Euroland’s new bondholders are being told that in future EU crises they might get stiffed along with the taxpayers. Well maybe. 2013 is a long way off, and most of this year’s crop of finance ministers will be doing other jobs. There’s also a high probability that the unloved Euro will be gone in its present form. As the story is still being spun, we will await the day’s “clarifications” and spin.

The other developing story, is the who said what bad thing about who, as released by Wikileaks from the gossip columns of the massed ranks of US diplomats and spies. More on both probably later in the week.

Stung by last year’s fiasco in the frigid snows of Copenhagen, this year’s global warming flat earthers, are assembling in coven in Cancun to try one more time to convince the world of a need for carbon taxes, carbon futures, carbon capture and a whole lot of other bureaucratic nonsense the new world order fanatics want to impose on the rest of us. More on this global warming conference once Britain and Europe get out of our mini ice age.

At the Comex silver depositories Friday, final figures were: Registered 48.55 Moz, Eligible 58.67 Moz, Total 107.23 Moz.

The paper standard is self-destructive."

Hans F. Sennholz


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today, the US mortgage morass continues to get worse. With no real idea who owns what in phony triple-A securitisations, thanks to MERS, deadbeat borrowers are getting to live rent and mortgage free for longer and longer. Below the Journal gets back on the case. Stay long precious metals. The whole fiat money casino has gone out of control.

November 27, 2010, 5:00 AM ET

Number of the Week: 492 Days From Default to Foreclosure

492: The number of days since the average borrower in foreclosure last made a mortgage payment.

Banks can’t foreclose fast enough to keep up with all the people defaulting on their mortgage loans. That’s a problem, because it could make stiffing the bank even more attractive to struggling borrowers.

In recent months, the number of borrowers entering severe delinquency — meaning they missed their third monthly mortgage payment — has been on the decline, falling to about 700,000 in October, according to mortgage-data provider LPS Applied Analytics. But it’s still more than double the number of foreclosure processes started.

As a result, banks are taking progressively longer to foreclose. The average borrower in the foreclosure process hadn’t made a payment in 492 days as of the end of October, according to LPS. That compares to 382 days a year ago and a low of 244 days in August 2007.

In other words, people who default on their mortgages can reasonably expect, on average, to stay in their homes rent-free more than 16 months. In some states such as New York and Florida, the number is closer to 20 months.

That’s a meaningful incentive, and it’s likely to grow unless banks manage to boost their throughput. Speeding up the process won’t be easy, as demonstrated by the banks’ continuing legal troubles related to robo-signers, bank employees who signed foreclosure affidavits without properly checking the required loan documentation.

Millions of Americans still are paying their mortgages even though they owe more than their homes are worth. The more banks’ backlog grows, the more likely they are to join it, adding to the already giant pile of foreclosures weighing on the housing market

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."

Daniel Webster

The monthly Coppock Indicators finished October:

DJIA: +204 Down. NASDAQ: +289 Down. SP500: +196 Down.

The bull market (or bear market rally) that commenced on Nasdaq on 30/4/09 at 1717 has ended. (30/5/09 SP 500 at 919, 30/5/09 DJIA 8500.) While the indicators can flip flop at market turns, this action is rare on the slow monthly indicators. October is the fifth down month in a row.


No comments:

Post a Comment