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’That Mad EIB plan (and other trial balloons)
Tuesday’s post by Macro Man on the latest eurozone trial balloons is so good we that we wanted to pass along the highlights (while also encouraging you to read the whole thing).
First, Macro Man’s considers what shall henceforth be known as the The Liesman Plan.
And we cross to Karlsruhe (updated)
Breaking (via Reuters)….
RTRS-GERMAN CONSTITUTIONAL COURT SAYS REJECTS LAWSUITS AIMED AT BLOCKING GERMAN PARTICIPATION IN EURO ZONE BAILOUTS
RTRS-GERMAN CONSTITUTIONAL COURT SAYS RULING ON BAILOUTS WAS “VERY TIGHT”
What’s wrong with Greece bailout II…
… in three easy-to-read paragraphs.
From Jacques Cailloux and his team at RBS.
1. Greece Bail Out II now detailed, rolling crisis still likely: The Euro Summit was first and foremost a summit aiming at concluding the negotiations surrounding Greece Bail Out II.
Greek black hole [updated]
Seller beware and all that, but there’s (totally-unconfirmed) talk of a €3.5bn black hole in Greece’s austerity plan.
Now, were are not taking it too seriously.
REPEAT WE ARE NOT TAKING IT TOO SERIOUSLY.
Eurogroup to Greece – your move
Monday’s (very early) statement from the Eurogroup.
Quick summary. We’ve done our bit (or will have by early July), now it’s your turn.
(emphasis ours)
Statement by the Eurogroup
The Greek authorities are embarking on a significant and necessary adjustment effort.
The real risk to Greece is Greece
An obvious point maybe, but one worth making, reckons JPMorgan’s David Mackie.
He thinks we should move on from worrying about the dispute between Germany and the ECB on Greek Bailout II and instead focus on what’s happening in Athens.
The biggest gamble in IMF history
…At any rate, it’s an absolute master-class in euphemism:
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) have concluded a mission to Greece to discuss recent economic developments and policies needed to keep the country’s economic program on track.
The Vienna Initiative is already here
Bet you didn’t know that, huh?
Spotted in the Eurogroup’s May 16 aid plan for Portugal — a little bit of bank cooperation:
“At the same time, the Portuguese authorities will undertake to encourage
China takes on its massive muni mess with a $463bn bailout
Did you miss this whoppingly-important story out of China?
It seems quite a few people have. Reuters reported on Tuesday that China plans to shift RMB2,000-3,000bn, or $308-463bn, of debt off local governments,
Euro solidarity/desperation, gold edition
At this point, extra EU loans to Greece would be dead money, susceptible to debt haircuts pari passu with private creditors.
But if you’ve got to do a one-off fiscal transfer, and an entire currency union is at stake…
Portugal, sell your gold!
The terms of Portugal’s draft bailout agreement have been revealed. But no mention within the documents about what happens to the country’s ample stash of gold bullion.
Some 12.3m troy ounces in fact,
Revealed: the Portuguese agreement
A great scoop from the Portuguese newspaper Expresso — they’ve managed to get a copy of the draft memorandum of understanding between Portugal and the EU/IMF/ECB, as part of its three-year bailout.
You won’t find the total cost of the bailout or its interest rate here,
Portugal – prepare for more privatisation
The Portuguese rescue mission is progressing quicker than we thought.
The Eurogroup and ECOFIN ministers outlined the three pillars of the bailout package on Friday and notably it included an “ambitious”
Missing – Portuguese dead cat
What next for Portuguese government bonds?
At pixel time on Thursday morning there hadn’t been so much as a dead cat bounce, which was not the case with Greece or Ireland when they went cap in hand to the IMF/EU.
Spain drifts away
Spot the odd one out:
It’s Spain of course, which has decoupled from other members of the periphery over the past three months with its bond yields not only tightening against bunds but also falling outright (from a high of 5.45 per cent to just over 5 per cent today.
One step from high yield – Portugal
More on Tuesday’s downgrade of Portugal (and, to a lesser extent, Greece) from the excellent Harvinder Sian at RBS.
He reckons S&P are spot on with their decision to cut Portugal to BBB- (with the ratings outlook negative) and says there a real risk of a downgrade to junk.
The political problem with Portugal’s bailout
Yes, Portuguese bond yields have hit unsustainable levels.
But don’t count on an EFSF-IMF bailout just yet.
UBS’ head of European economic research, Stephan Deo, points out that it might be hard to hammer out a bailout and accompanying budget cuts if no one’s home,
Calculating the size of a Portugal rescue
More on the topic du jour, Portugal.
Harvinder Sian at RBS has taken a stab at estimating the size of a bailout if (as many commentators now expect) the country does approach the IMF and the European Financial Stability Facility (EFSF).
A problem for Portugal, charted
From Bank of America Merrill Lynch’s Thanos Vamvakidis (a former IMF economist) — a chart to kick off a week that looks like it might be heavy on eurozone newsflow:
BoI refuses to go quietly
Bank of Ireland won’t bow to the inevitable.
Monday after (stock) market hours statement:
The Bank is discussing a number of structures with the State to raise the requisite Core Tier 1 capital by 28 February 2011.
Doing more with less (EFSF), part one
There was definitely yesterday a discussion about increasing [the European Financial Stability Facility] to more than 440 billion [euros], so increasing the total [to] 750 billion, but the Eurogroup has yesterday rejected that idea.
The diluted Allied Irish Banks
The price action in Allied Irish Banks on Thursday morning:
The falls follows a report in the Irish Times that Brian Lenihan, Minister for Finance, was taking steps to effectively nationalise Allied Irish Banks.
How to save the eurozone, by JPMorgan
Forget debt restructuring. Or E-bonds. Or US-style quantitative easing.
JPMorgan have found a different way out of the European crisis.
The bank’s Joseph Lupton and David Mackie have switched some
King of the WikiLeaks – and global bailouts
WikiLeaks is making for all sorts of financial fun.
Especially where it concerns Mervyn King.
Earlier this month we learned that the Bank of England governor had some naughty things to say about the then-future UK chancellor and prime minister.
Not convinced by CoCos? How about COERCs?
Forget CoCos.
Those squirrely Contingent Convertibles — bonds which would automatically convert into equity once a bank’s capital ratio falls below a certain trigger — are still riddled with question marks.
EFSF capitulation
What fresh EFSF hell is this?
European officials are considering measures to overhaul the eurozone’s €440bn rescue fund, including using it to buy bonds of distressed governments, say people involved in the deliberations.
The morning after the Irish bailout
Monday’s early price action:
New capital requirements for Ireland’s banks [updated]
Another €8bn needed, according to the Central Bank of Ireland to get core Tier One capital up to at least 12 per cent — with the possibility of more to come post the March 2011 stress test.
From the Prudential Capital Assessment Review (PCAR) released on Sunday evening (emphasis ours):
EU/IMF Irish bailout – the details
Here it is in all its gory detail
But first a few points of interest: there will be NO shortback and sides for senior bondholders; the four year plan has gone (it lasted all of four days); Ireland’s SWF is getting sucked dry,