Perspectives on the global economic changes

UlanBatori · Post by **UlanBatori** » 13 Jul 2015 21:15

The obvious question is: "Who Bought Greek Bonds in April 2014 at 4.95 percent and why?"
The same would apply today. Either the buyers are no smarter, or they are as crooked.

TSJones · Post by **TSJones** » 13 Jul 2015 21:21

such bonds are usually bought at discount of the face value thus giving a much higher percentage rate than what is stipulated when the bond is issued.

the market discounts everything including the jewelry that women wear in India as family savings.

sic transit gloria

forever and ever, yahoo

UlanBatori · Post by **UlanBatori** » 14 Jul 2015 00:27

Don't the original sellers (the issuers) get the face value in money? Otherwise aren't they digging a hole for themselves right away - promising to pay face value + promised rate of interest? What the market does with them after that should be of no concern to Kleptos & Co unless they want to buy them back if goes down (ha ha!)

chanakyaa · Post by **chanakyaa** » 14 Jul 2015 05:01

Not necessary for the issuer to get a par at issuance. If the terms of the 2014 issue at 4.75% coupon and 4.95% yield are correct, Greece received approx. 94.65 per 100 euros of face value.

- Issuer: The Hellenic Republic
- Amount: €3 billion euros ($4.15 billion, upsized from €2.5 Billion)
- Maturity: April 17, 2019
- Tenor: 5 Years
- Yield: 4.95%
- Coupon: 4.75%
- Rating: Caa3/B-/B-
- Underwriters: BofAML, DB, GS, HSB, JPM, MS
- Governing Law: English

If I remember my bond math correctly,
=PRICE(TODAY(),TODAY()+(365*5),4.75,4.95,100,2)

Neshant · Post by **Neshant** » 14 Jul 2015 12:15

The tyranny that will come with a govt controlled digital currency

Neshant · Post by **Neshant** » 14 Jul 2015 13:22

Since the bond sold at below par and was offering a yield of 4.95% at par, effectively its an interest rate over 10+%.

And that was the rate in early 2014 when their troubles seemed so far away.
Now it looks as though they're here to stay.
Oh I believe
in yesterday.

TSJones · Post by **TSJones** » 14 Jul 2015 23:15

Neshant wrote:Since the bond sold at below par and was offering a yield of 4.95% at par, effectively its an interest rate over 10+%.

And that was the rate in early 2014 when their troubles seemed so far away.
Now it looks as though they're here to stay.
Oh I believe
in yesterday.

sir paul mccartney has been bettered!

UlanBatori · Post by **UlanBatori** » 15 Jul 2015 06:33

Neshant wrote:Since the bond sold at below par and was offering a yield of 4.95% at par, effectively its an interest rate over 10+%.

That went right over my head. The yield was 4.95%, because they could not sell at 4.75%. So isn't the interest rate effectively 4.95% pa, if someone bought at issue and holds to maturity?

What scares me is that part saying "Underwritten by .." I see some familiar names there. I guess each one's share is under 1B Oiros so it's only a blip on their stock prices?
As the old Pentagon saying goes:

A billion here, a billion there, pretty soon it starts adding up to some real money!

Austin · Post by **Austin** » 16 Jul 2015 09:52

The U.S. is facing a $1 trillion pension shortfall

http://money.cnn.com/2015/07/14/retirem ... -pensions/

Austin · Post by **Austin** » 16 Jul 2015 09:54

China-Led Bank Will "Keep America Honest," Provide Alternative To IMF, Nomura Says

TSJones · Post by **TSJones** » 16 Jul 2015 12:00

Austin wrote:China-Led Bank Will "Keep America Honest," Provide Alternative To IMF, Nomura Says

I love the comment "word has it casino opens across town, Loosest slots and coldest drinks. Buffet opens at !0."

Suraj · Post by **Suraj** » 16 Jul 2015 21:40

The I.M.F. Is Telling Europe the Euro Doesn’t Work

It reads like a dry, 1,184-word memorandum about fiscal projections. But the International Monetary Fund’s memo on Greek debt sustainability, explaining why the I.M.F. cannot participate in a new bailout program unless other European countries agree to huge debt relief for Greece, has provided the “Emperor Has No Clothes” moment of the Greek crisis, one that may finally force eurozone members to either move closer to fiscal union or break up.

The I.M.F. memo amounts to an admission that the eurozone cannot work in its current form. It lays out three options for achieving Greek debt sustainability, all of which are tantamount to a fiscal union, an arrangement through which wealthier countries would make payments to support the Greek economy. Not coincidentally, this is the solution many economists have been telling European officials is the only way to save the euro — and which northern European countries have been resisting because it is so costly.

The three options laid out by the I.M.F. would have different operations, but they share an important feature: They involve other European countries giving Greece money without expecting to get it back. These transfers would be additional to the approximately 86 billion euros in new loans contemplated in Monday’s deal.

“Wait a minute,” you might say. “The I.M.F. isn’t calling for a fiscal union; it’s calling for debt relief.” But once a debt relief program becomes big enough, this becomes a distinction without a difference; they’re both about other eurozone countries giving Greece money.

Indeed, one of the debt relief options proposed by the I.M.F. is “explicit annual transfers to the Greek budget,” that is, direct payments from other governments to Greece, which it could use to make its debt payments. This, obviously, is a fiscal union.

A second option is extending the grace period, during which Greece would be relieved of the obligation to make interest or principal payments on its debt to European countries, through the year 2053. That’s not a typo. Under this plan, Greece would make no more debt payments until Justin Bieber is 59 years old. This is a fiscal union by another name, since those lengthy and favorable credit terms would save the Greeks money at the expense of Greece’s creditors, most of which now are other European governments or the I.M.F.

The third option floated by the I.M.F., a cancellation of a portion of Greece’s debts, has been fiercely resisted by the German government, even though this is the option that least obviously constitutes a continuing fiscal union. Debt cancellation is a one-time fiscal transfer (if I lend you $100 and then forgive the debt, that’s much like me simply giving you $100), but at least in theory it would be done only once, with Greece expected to stand on its own otherwise. The important exception is that Greece would still need to rely on European governments to lend it money at favorable rates, though not quite as favorable as under the Old Bieber scenario.

Unfortunately, however, this is not Greece’s first bailout rodeo. Previous bailouts have had to be revised and enlarged, and as the I.M.F. notes in the section of its memo about “considerable downside risk,” that could happen again. The plans for Greece to regain solvency rely on fast economic growth and sharp rises in labor productivity that outperform the rest of Europe — something that cannot be guaranteed. They also rely on the country’s running a large primary surplus for an extended period — that is, collecting much more in taxes than it spends on government services, which typically does not prove popular with the voting public.

The memo makes clear what the real cost to Europe of continued eurozone membership for Greece is: If European governments want to keep Greece in, they’re going to have to put up a lot of money in one non-loan form or another, money they will give Greece that they never get back.

But the I.M.F. officials are saying they cannot pretend that a bailout deal will lead to an eventual payment in full from Greece. If Greece stays in the euro, it will need much more financial support from the rest of Europe than was admitted in Monday’s deal, and the I.M.F. is asking European governments to put that admission on paper.

Austin · Post by **Austin** » 18 Jul 2015 00:01

China Gold and Forex Reserves

Austin · Post by **Austin** » 18 Jul 2015 15:38

Peter Schiff on Verbal Duel with some trader on Floor

Austin · Post by **Austin** » 18 Jul 2015 23:03

Greece’s Lesson For Russia — Paul Craig Roberts

Neshant · Post by **Neshant** » 19 Jul 2015 01:35

chanakyaa · Post by **chanakyaa** » 20 Jul 2015 05:52

TPP and the Mass Grave Politics on Malaysia

Austin · Post by **Austin** » 20 Jul 2015 09:26

Neshant wrote:

Interesting Interview

Muppalla · Post by **Muppalla** » 21 Jul 2015 00:02

Austin wrote:The U.S. is facing a $1 trillion pension shortfall

http://money.cnn.com/2015/07/14/retirem ... -pensions/

Big deal. There are several printing machines and they can do all that they are doing since last decade. "Obamaonimics"

TSJones · Post by **TSJones** » 22 Jul 2015 08:43

A $4 Trillion Force From China That Helped the Euro Now Hurts It

http://www.bloomberg.com/news/articles/ ... cmpid=yhoo

China's tumbling reserves.........amazing how fast all of this has happened.

where are the 50 centers? I want to discuss!

hanumadu · Post by **hanumadu** » 22 Jul 2015 09:24

Muppalla wrote:
Austin wrote:The U.S. is facing a $1 trillion pension shortfall

http://money.cnn.com/2015/07/14/retirem ... -pensions/
Big deal. There are several printing machines and they can do all that they are doing since last decade. "Obamaonimics"

They should print it soon when the dollar is still the reserve currency. In a few years, they might realize a little too late that they cannot print with impunity any more.

chanakyaa · Post by **chanakyaa** » 23 Jul 2015 06:10

A $4 Trillion Force From China That Helped the Euro Now Hurts It

http://www.bloomberg.com/news/articles/ ... cmpid=yhoo

China's tumbling reserves.........amazing how fast all of this has happened.

where are the 50 centers? I want to discuss!

Out of curiosity, who are the "50 centers" and what is it that you "want to discuss"??

TSJones · Post by **TSJones** » 23 Jul 2015 13:22

udaym wrote:
A $4 Trillion Force From China That Helped the Euro Now Hurts It

http://www.bloomberg.com/news/articles/ ... cmpid=yhoo

China's tumbling reserves.........amazing how fast all of this has happened.

where are the 50 centers? I want to discuss!
Out of curiosity, who are the "50 centers" and what is it that you "want to discuss"??

fifty centers are Chinese posters who are allegedly paid by their government to post on foreign forums such as this one.

I want to discuss because I want to know what they think is currently happening in China with the collapse of their stock market and foreign reserves and their cherry economic forecasts..

amit · Post by **amit** » 23 Jul 2015 13:48

^^^^^

TSJ,

The 50 centers are freelancers and they post when they are paid. Currently it seems that handlers are busy elsewhere trying to put out fires in places like Weibo, WeChat etc. So no money no posts. BRF has been remarkably free of 50 cent posts for some time now and I for one am very disappointed.

They are so much fun!

amit · Post by **amit** » 23 Jul 2015 13:50

IMO, this chart deserve standalone viewing. Says more than a full article. Good job Bloomberg!

Theo_Fidel · Post by **Theo_Fidel** » 23 Jul 2015 20:32

TSJones wrote:fifty centers are Chinese posters who are allegedly paid by their government to post on foreign forums such as this one.

There is nothing allegedly about this Sir.

BRF members including myself have tried to access BRF from within China from all manner of places. It is uniformly blocked. So if a poster is posting from China he has official CPC permission to do so. Whether he/she gets paid or not in short hand we call them 50 centers.
-------------------

Amit,

That image does not make sense. Why would CPC try to strengthen the yuan. Ideally China should just let the value of the Yuan collapse and export its way out of the problem, rest of the world be damned.

TSJones · Post by **TSJones** » 24 Jul 2015 16:23

Theo_Fidel wrote:
TSJones wrote:fifty centers are Chinese posters who are allegedly paid by their government to post on foreign forums such as this one.
There is nothing allegedly about this Sir.

BRF members including myself have tried to access BRF from within China from all manner of places. It is uniformly blocked. So if a poster is posting from China he has official CPC permission to do so. Whether he/she gets paid or not in short hand we call them 50 centers.
-------------------

Amit,

That image does not make sense. Why would CPC try to strengthen the yuan. Ideally China should just let the value of the Yuan collapse and export its way out of the problem, rest of the world be damned.

Loss of face.

Shame of not rivaling the US and EU system.

Admitting that the Chinese economic system has no real depth and must continue export or die policy. which the US and EU consumers don't want Chinese export goods anymore.

etc.

TSJones · Post by **TSJones** » 25 Jul 2015 21:22

Krugman: EU not listening to keynesians.........

http://www.chron.com/opinion/outlook/ar ... 404243.php

On other fronts, however, the MIT gang's good advice has been ignored. The IMF's research department, under Blanchard's leadership, has done authoritative work on the effects of fiscal policy, demonstrating beyond any reasonable doubt that slashing spending in a depressed economy is a terrible mistake, and that attempts to reduce high levels of debt via austerity are self-defeating. But European politicians have slashed spending and demanded crippling austerity from debtors anyway

TSJones · Post by **TSJones** » 25 Jul 2015 21:26

The oil crash has done nothing for America

http://finance.yahoo.com/news/oil-crash ... 00069.html

Prabhu also said the company felt that the money being conserved at the pump was being funneled into savings accounts, a trend that has been backed up in various economic data reports.

"We continue to see the largest share of these savings going to debt repayment and stronger consumer balance sheet," said Prabhu.

the horror.....

Austin · Post by **Austin** » 25 Jul 2015 22:17

US Fed Leak on Rate Hike Suggests a Murky Economic Landscape

Neshant · Post by **Neshant** » 27 Jul 2015 07:55

Austin · Post by **Austin** » 30 Jul 2015 08:59

Here's How Much the Strong Dollar Hurts American Companies

http://www.bloomberg.com/news/articles/ ... -companies

TSJones · Post by **TSJones** » 30 Jul 2015 13:18

^^^^^
pay no attention to that nonsense. everybody knows the dollar is about to collapse.

real soon now.

amit · Post by **amit** » 30 Jul 2015 14:37

Theo_Fidel wrote:Amit,

That image does not make sense. Why would CPC try to strengthen the yuan. Ideally China should just let the value of the Yuan collapse and export its way out of the problem, rest of the world be damned.

Sorry Theo,

Just saw this message you posted about a week ago. You of all people should know that priorities have changed in China. They have announced a firm date or let's say timeline by which the Chinese GDP will overtake the US. How can that be achieved with Yuan collapse vis a vis the US$ haan ji?

A devaluation of the Yuan would result in a smaller GDP - denominated in USD - for China. Cannot be allowed to happen. I think the Bloomberg numbers make ample sense. It just go to show the growing hubris of the CCP leadership. Have money, can fix everything.

It's not longer about keeping your head low and exporting the hell out of everyone to make $$$. It's now about using those $$$ to grab the Middle Kingdom's "rightful" place in the comity of nations, which is right at the top with every other country paying "tribute".

The only problem IMHO is that they jumped the gun by about a decade.

The point is normal economic logic does not apply to China. We reached that conclusion years ago on BRF.

Neshant · Post by **Neshant** » 01 Aug 2015 08:19

GDP itself is a bogus measure of economic output.

Just about anything can be thrown into GDP calculations to create big numbers.

Banking & financing is mostly con artistry yet that is 25% of the US economy now.

Do you really think Greece which produces nothing is a 300 billion dollar economy? These numbers are made up out of whole cloth.

TSJones · Post by **TSJones** » 01 Aug 2015 18:14

Neshant wrote:GDP itself is a bogus measure of economic output.

Just about anything can be thrown into GDP calculations to create big numbers.

Banking & financing is mostly con artistry yet that is 25% of the US economy now.

Do you really think Greece which produces nothing is a 300 billion dollar economy? These numbers are made up out of whole cloth.

Neshant,

there is a Bank of America or a Wells Fargo building on most of the street corners in the city where I live.

I was just wondering what were your thoughts about the wages, taxes, stock dividends, etc. that these banks pay?

Altair · Post by **Altair** » 03 Aug 2015 21:53

WTI Crude Oil below 46$.

Suraj · Post by **Suraj** » 03 Aug 2015 23:40

And surprisingly, gas prices in Southern California are above $4, according to friends there. They were above $4 when it Brent/WTI were above $100 a barrel too.

nachiket · Post by **nachiket** » 03 Aug 2015 23:58

Suraj wrote:And surprisingly, gas prices in Southern California are above $4, according to friends there. They were above $4 when it Brent/WTI were above $100 a barrel too.

California gas prices seem to move independently of international crude prices or price drops in other parts of the country.

Suraj · Post by **Suraj** » 04 Aug 2015 00:09

Gas prices are over a dollar cheaper in the bay area. Seems like a local refinery output issue.