TIPSTER's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/506322/comments http://seekingalpha.com/article/693041/comments?source=feed#comment-6979581 6979581
As Meagan Greene points out, the ESM seniority is basically a fudge. It only really applies to sovereign debt and, by design, the new financing is directly to the banking sector. In the event there is a debt restructuring before the financing gets directed towards the banks, you just try telling Europe that the ESM is not structurally senior to all other creditors...

However, that aside... I cannot help feeling that Merkel's remarkable transformation from "Frau Nein" to "Countess Capitulate" marks a poignant turning point for European sentiment and it's political ambition... for once, it seems the politicians are having to turn to the people and resort to democratic process (or at least popular opinion). For once, Europeans appear to be collectively and concurrently objectively considering the true nature of their ambitions and desires towards a European political union. Ultimately, even in bureaucratic Brussels, the people do seem to have the power – which would mean that, not matter what the results of the process are, the final outcome will likely have more legs ... and more stability.]]> Sun, 01 Jul 2012 19:09:58 -0400
As Meagan Greene points out, the ESM seniority is basically a fudge. It only really applies to sovereign debt and, by design, the new financing is directly to the banking sector. In the event there is a debt restructuring before the financing gets directed towards the banks, you just try telling Europe that the ESM is not structurally senior to all other creditors...

However, that aside... I cannot help feeling that Merkel's remarkable transformation from "Frau Nein" to "Countess Capitulate" marks a poignant turning point for European sentiment and it's political ambition... for once, it seems the politicians are having to turn to the people and resort to democratic process (or at least popular opinion). For once, Europeans appear to be collectively and concurrently objectively considering the true nature of their ambitions and desires towards a European political union. Ultimately, even in bureaucratic Brussels, the people do seem to have the power – which would mean that, not matter what the results of the process are, the final outcome will likely have more legs ... and more stability.]]> http://seekingalpha.com/article/510701/comments?source=feed#comment-4787221 4787221
Interesting to see how Hollande and Sarkozy have dissected the Far Right popularity. Hollande choosing to take the anti-EU stance and Sarkozy honing in on the anti-immigration attitude. I'm not sure I agree with your supposition that Hollande will necessarily be the natural beneficiary from the Far Right pressure... it may have been disgruntlement towards immigration policies rather than Germanic oppression from the EU...

I guess only time will tell... v exciting!]]> Wed, 25 Apr 2012 15:53:37 -0400
Interesting to see how Hollande and Sarkozy have dissected the Far Right popularity. Hollande choosing to take the anti-EU stance and Sarkozy honing in on the anti-immigration attitude. I'm not sure I agree with your supposition that Hollande will necessarily be the natural beneficiary from the Far Right pressure... it may have been disgruntlement towards immigration policies rather than Germanic oppression from the EU...

I guess only time will tell... v exciting!]]> http://seekingalpha.com/article/508791/comments?source=feed#comment-4629241 4629241 Fri, 20 Apr 2012 16:58:59 -0400 http://seekingalpha.com/article/508791/comments?source=feed#comment-4578161 4578161
In this environment, in order to keep a yield curve low expansionary fiscal policies (deficits) must be met with expansionary monetary action (QE/ Fed buying treasury securities).

Pretty much every single major central bank in the world is playing the same balancing act, whether this causes much of the inflation we see around the world is one matter, but I regard this as inflationary monetary "policy", never-the-less.

There are no tangible or immediately observable "costs" as such, but there are intangible consequences or costs to this inflationary policy-loop. In the event of a currency collapse or inflation rise, the Fed's hands become more and more tied with respect to monetary responses to fiscal expansion. In this respect, it is prudent to communicate the limits or limitations of such fiscal-monetary coercion. I could be wrong, but think that is all Bernanke is saying and by saying it he's giving me a comfort level that he actually does understand the (lack of) depth of his powers...]]> Thu, 19 Apr 2012 10:50:24 -0400
In this environment, in order to keep a yield curve low expansionary fiscal policies (deficits) must be met with expansionary monetary action (QE/ Fed buying treasury securities).

Pretty much every single major central bank in the world is playing the same balancing act, whether this causes much of the inflation we see around the world is one matter, but I regard this as inflationary monetary "policy", never-the-less.

There are no tangible or immediately observable "costs" as such, but there are intangible consequences or costs to this inflationary policy-loop. In the event of a currency collapse or inflation rise, the Fed's hands become more and more tied with respect to monetary responses to fiscal expansion. In this respect, it is prudent to communicate the limits or limitations of such fiscal-monetary coercion. I could be wrong, but think that is all Bernanke is saying and by saying it he's giving me a comfort level that he actually does understand the (lack of) depth of his powers...]]> http://seekingalpha.com/article/487461/comments?source=feed#comment-4277511 4277511
That said, I really hope our goal should is not to stabilize the banking sector at ALL costs. I can't help feeling that there is a point at the extreme (and extremes seem to be a regular occurrence these days) a degree of instability in the banking sector may be the "least bad" outcome for the broader economy.

While I agree that Bernanke has been the World's central banker (if only because he controls the monetary levers of the World's reserve currency), I think we should remember that he effectively activated extremely accommodative policies in sectors of the global economy which were highly susceptible to the societal aggravation of rising inflation...

I'm not saying that this was Bernanke's fault, but his actions were not inconsequential.]]> Tue, 10 Apr 2012 04:35:47 -0400
That said, I really hope our goal should is not to stabilize the banking sector at ALL costs. I can't help feeling that there is a point at the extreme (and extremes seem to be a regular occurrence these days) a degree of instability in the banking sector may be the "least bad" outcome for the broader economy.

While I agree that Bernanke has been the World's central banker (if only because he controls the monetary levers of the World's reserve currency), I think we should remember that he effectively activated extremely accommodative policies in sectors of the global economy which were highly susceptible to the societal aggravation of rising inflation...

I'm not saying that this was Bernanke's fault, but his actions were not inconsequential.]]> http://seekingalpha.com/article/484361/comments?source=feed#comment-4276851 4276851 Tue, 10 Apr 2012 03:28:02 -0400 http://seekingalpha.com/article/434061/comments?source=feed#comment-3510631 3510631 Thu, 15 Mar 2012 13:33:27 -0400 http://seekingalpha.com/article/414481/comments?source=feed#comment-3251501 3251501
I have a couple of questions. What is the logic (Mathematics) behind 75-85% participation versus to-CAC-or-not-to-CAC.

Secondly, the cynic in me wonders how much significance to attach to the LTRO-PSI relationship. It seems that those highly involved in the LTRO are also a shoe-in for the PSI participation. Makes the European bond "market" look ominously like a rigged game.

There is a danger of creating something more like a mutated Sovereign CDO market now - where the subordination of your tranche is not dependent on the structure of the security but on the character of the holder: ECB senior, Banks Mez (sub to ECB but back-hand bailout via LTRO)... and ordinary private investors are, of course, Equity. ]]> Wed, 07 Mar 2012 10:49:22 -0500
I have a couple of questions. What is the logic (Mathematics) behind 75-85% participation versus to-CAC-or-not-to-CAC.

Secondly, the cynic in me wonders how much significance to attach to the LTRO-PSI relationship. It seems that those highly involved in the LTRO are also a shoe-in for the PSI participation. Makes the European bond "market" look ominously like a rigged game.

There is a danger of creating something more like a mutated Sovereign CDO market now - where the subordination of your tranche is not dependent on the structure of the security but on the character of the holder: ECB senior, Banks Mez (sub to ECB but back-hand bailout via LTRO)... and ordinary private investors are, of course, Equity. ]]> http://seekingalpha.com/article/322089/comments?source=feed#comment-2205035 2205035 Thu, 26 Jan 2012 08:59:42 -0500 http://seekingalpha.com/article/319265/comments?source=feed#comment-2175635 2175635 Sun, 15 Jan 2012 10:43:55 -0500 http://seekingalpha.com/article/317590/comments?source=feed#comment-2153441 2153441
Government refi's and bond auctions are high priorities on investor watchlists this year.

Next week is going to be a big one with big auctions in the US, UK, Germany and... SPAIN and ITALY.

Brace yourself!]]> Fri, 06 Jan 2012 12:45:15 -0500
Government refi's and bond auctions are high priorities on investor watchlists this year.

Next week is going to be a big one with big auctions in the US, UK, Germany and... SPAIN and ITALY.

Brace yourself!]]> http://seekingalpha.com/article/317717/comments?source=feed#comment-2153407 2153407
Spain's deficit trajectory is much more worrying (see http://on.ft.com/xdezrT) and I think Spain is much more dependent on foreign creditors than Italy. The unemployment and property stories in Spain are some of the worst in Europe (never mind the Eurozone).

Having said that I think Italy's debt profile (if my memory serves me correctly) is a little alarming as it has a lot of short term notes coming due over the next year or so...

Of course, neither can print their own currency!

Both are in a pretty bad fiscal predicament but for different reasons.]]> Fri, 06 Jan 2012 12:37:56 -0500
Spain's deficit trajectory is much more worrying (see http://on.ft.com/xdezrT) and I think Spain is much more dependent on foreign creditors than Italy. The unemployment and property stories in Spain are some of the worst in Europe (never mind the Eurozone).

Having said that I think Italy's debt profile (if my memory serves me correctly) is a little alarming as it has a lot of short term notes coming due over the next year or so...

Of course, neither can print their own currency!

Both are in a pretty bad fiscal predicament but for different reasons.]]> http://seekingalpha.com/article/316168/comments?source=feed#comment-2152969 2152969 Fri, 06 Jan 2012 10:58:36 -0500 http://seekingalpha.com/article/316168/comments?source=feed#comment-2140599 2140599
As so many of our economic arguments are grounded in our perception of inflation it just seems to be that if we can understand this concept more and, for example, explain why such expansive monetary policy has led to such little inflation (at least officially reported) we could then understand which solutions (and I believe there are practical qualities to both MMT and Austrian perceptions) are most applicable to our economies today.

But if anything, the responses above confirm to me that inflation is as much subjective as pure-and-simple observable fact. It's almost as though inflation is this economic aura that no person can unequivocally accurately quantify, only modeled in a rudimentary sense (reminds me of the "light particle vs wave paradox"). Yet, unlike electro-magnetism, this is not quantum physics of the unknown... inflation is entirely man made! ]]> Sat, 31 Dec 2011 15:10:23 -0500
As so many of our economic arguments are grounded in our perception of inflation it just seems to be that if we can understand this concept more and, for example, explain why such expansive monetary policy has led to such little inflation (at least officially reported) we could then understand which solutions (and I believe there are practical qualities to both MMT and Austrian perceptions) are most applicable to our economies today.

But if anything, the responses above confirm to me that inflation is as much subjective as pure-and-simple observable fact. It's almost as though inflation is this economic aura that no person can unequivocally accurately quantify, only modeled in a rudimentary sense (reminds me of the "light particle vs wave paradox"). Yet, unlike electro-magnetism, this is not quantum physics of the unknown... inflation is entirely man made! ]]> http://seekingalpha.com/article/316168/comments?source=feed#comment-2139980 2139980
If anything this highlights just how important the concept of inflation is yet we seem to devote relatively little or no time to understanding it or asking why official inflation measures have remained so contained in the face of such monetary expansion.]]> Sat, 31 Dec 2011 08:46:06 -0500
If anything this highlights just how important the concept of inflation is yet we seem to devote relatively little or no time to understanding it or asking why official inflation measures have remained so contained in the face of such monetary expansion.]]> http://seekingalpha.com/article/316168/comments?source=feed#comment-2139964 2139964 I love to criticize Krugman like the next man but I believe you both have the same argument. Krugman did not say countries "borrow their currency" , he said they borrow "in" their currency. So he may be actually making the same sovereignty argument as you.

Basically implying that Europe's woes are almost entirely the product of the political uncertainty of trying to manage a loose political confederation within tight monetary rigidity. With the ability to issue debt in their own currency (and run monetary policy in balance with this), the yields on these sovereigns individually would not be nearly so high. Unfortunately the EU crisis may show that there are occasions where the sum of the parts may actually be GREATER than the whole? ]]> Sat, 31 Dec 2011 08:32:52 -0500 I love to criticize Krugman like the next man but I believe you both have the same argument. Krugman did not say countries "borrow their currency" , he said they borrow "in" their currency. So he may be actually making the same sovereignty argument as you.

Basically implying that Europe's woes are almost entirely the product of the political uncertainty of trying to manage a loose political confederation within tight monetary rigidity. With the ability to issue debt in their own currency (and run monetary policy in balance with this), the yields on these sovereigns individually would not be nearly so high. Unfortunately the EU crisis may show that there are occasions where the sum of the parts may actually be GREATER than the whole? ]]> http://seekingalpha.com/article/313145/comments?source=feed#comment-2102174 2102174
This was a diplomatic disaster for the UK. Cameron thought he could walk into a room filled with highly seasoned politicians all trying to "save the Euro" and bring new ultimatums to the table while they appeared in a diplomatically vulnerable position on the proviso that he held an all powerful veto to their efforts - he was trying to hold them over a barrel. What he did not anticipate was that they could move the goal posts quite as expediently as they did. He walked into a (pretty obvious) trap in my opinion. I'll tell you two people that anticipated this possibility (although they may not have predicted it)...

1. A Mekel
2. N Sarkozy

It was not the ends (veto) but the means (negotiation tactics) that left Cameron looking like a political novice.]]> Tue, 13 Dec 2011 11:05:37 -0500
This was a diplomatic disaster for the UK. Cameron thought he could walk into a room filled with highly seasoned politicians all trying to "save the Euro" and bring new ultimatums to the table while they appeared in a diplomatically vulnerable position on the proviso that he held an all powerful veto to their efforts - he was trying to hold them over a barrel. What he did not anticipate was that they could move the goal posts quite as expediently as they did. He walked into a (pretty obvious) trap in my opinion. I'll tell you two people that anticipated this possibility (although they may not have predicted it)...

1. A Mekel
2. N Sarkozy

It was not the ends (veto) but the means (negotiation tactics) that left Cameron looking like a political novice.]]> http://seekingalpha.com/article/313145/comments?source=feed#comment-2100342 2100342
Cameron was a mug not because he exercised his veto (I believe any UK leader would have done the same) but the way he went about it. It was the means not the end which determined Britain's isolation. By instigating his conversations first and primarily with a threat of veto it was easy for the other 26 nations (led by France and Germany) to spin the table on Cameron as an unconstructive participant who did not have the success of the EU at heart. As a result he did not even get to put all his bargaining chips on the table for all (especially non-German/French members) to appreciate and digest. This was a bad outcome for Britain... but not for France and Germany.]]> Mon, 12 Dec 2011 15:40:45 -0500
Cameron was a mug not because he exercised his veto (I believe any UK leader would have done the same) but the way he went about it. It was the means not the end which determined Britain's isolation. By instigating his conversations first and primarily with a threat of veto it was easy for the other 26 nations (led by France and Germany) to spin the table on Cameron as an unconstructive participant who did not have the success of the EU at heart. As a result he did not even get to put all his bargaining chips on the table for all (especially non-German/French members) to appreciate and digest. This was a bad outcome for Britain... but not for France and Germany.]]> http://seekingalpha.com/article/313003/comments?source=feed#comment-2096499 2096499
Given that there is no such thing as a flawless political or economic construction. When does a hefty "can kick" deserve the right to be considered an "effective solution"?]]> Sat, 10 Dec 2011 13:25:19 -0500
Given that there is no such thing as a flawless political or economic construction. When does a hefty "can kick" deserve the right to be considered an "effective solution"?]]> http://seekingalpha.com/article/311764/comments?source=feed#comment-2096444 2096444 http://bit.ly/uO0ZGd" let's just say that's a matter of opinion...

That said I agree with the sentiment of what you are saying. If the Euro is to survive it needs the stoic, strict, fair and transparent political structure, with automatic punitive measures for fiscal mismanagement.

And, yes, Cameron is an muppet for the way he played his hand and has left the British economy in a very vulnerable place with respect to Europe. I feel he has done the British public a disservice by offering only political criticism without ever seemingly expressing any creative input of his own. I thought that was what we employed politicians for? Perhaps I'm too old fashioned.]]> Sat, 10 Dec 2011 12:47:55 -0500 http://bit.ly/uO0ZGd" let's just say that's a matter of opinion...

That said I agree with the sentiment of what you are saying. If the Euro is to survive it needs the stoic, strict, fair and transparent political structure, with automatic punitive measures for fiscal mismanagement.

And, yes, Cameron is an muppet for the way he played his hand and has left the British economy in a very vulnerable place with respect to Europe. I feel he has done the British public a disservice by offering only political criticism without ever seemingly expressing any creative input of his own. I thought that was what we employed politicians for? Perhaps I'm too old fashioned.]]> http://seekingalpha.com/article/311956/comments?source=feed#comment-2088418 2088418
Perhaps trying to choose between Western Central Banks is much like choosing between pieces of dog muck on the bottom of one's shoe.]]> Wed, 07 Dec 2011 08:35:46 -0500
Perhaps trying to choose between Western Central Banks is much like choosing between pieces of dog muck on the bottom of one's shoe.]]> http://seekingalpha.com/article/311629/comments?source=feed#comment-2088190 2088190
Some comfort can be drawn from the fact that EU leaders are at least negotiating on the right axis now though.

You can imagine Sarkozy saying: OK Angela I've conceded on the structural issues/long term solvency (Treaty Change), now you give me (my banking sector) some leeway on shorter term liquidity measures (Eurobonds/ECB-printin... financing etc)... this is a much better place than Europe was at 2 weeks ago. A comprehensive "solution" is actually possible now - whether it is likely or not is another matter.]]> Wed, 07 Dec 2011 05:07:16 -0500
Some comfort can be drawn from the fact that EU leaders are at least negotiating on the right axis now though.

You can imagine Sarkozy saying: OK Angela I've conceded on the structural issues/long term solvency (Treaty Change), now you give me (my banking sector) some leeway on shorter term liquidity measures (Eurobonds/ECB-printin... financing etc)... this is a much better place than Europe was at 2 weeks ago. A comprehensive "solution" is actually possible now - whether it is likely or not is another matter.]]> http://seekingalpha.com/article/311956/comments?source=feed#comment-2088174 2088174
Europeans have been berated for their inflexible, stoic, Germanic central bank, but there is a plus side. In terms of addressing the root cause of mega asset bubbles, there is something to be said for a central bank with a simpler, less politically convoluted mandate.]]> Wed, 07 Dec 2011 04:48:07 -0500
Europeans have been berated for their inflexible, stoic, Germanic central bank, but there is a plus side. In terms of addressing the root cause of mega asset bubbles, there is something to be said for a central bank with a simpler, less politically convoluted mandate.]]> http://seekingalpha.com/article/311764/comments?source=feed#comment-2084155 2084155 I think it was Kit Juckes who said, the Euro is a "brittle" currency in the sense that it's either "Strong or Gone" ... if Merkel gets her way it may be too strong for her comfort.]]> Mon, 05 Dec 2011 11:51:52 -0500 I think it was Kit Juckes who said, the Euro is a "brittle" currency in the sense that it's either "Strong or Gone" ... if Merkel gets her way it may be too strong for her comfort.]]> http://seekingalpha.com/article/311764/comments?source=feed#comment-2084057 2084057 However what I meant to say was that I think the German industrial base understand that the FUTURE of German export growth is more dependent on countries like China than peripherals and countries like Belgium - which have some serious economic problems of their own.

My general point is, if this was all about German's protecting their precious manufacturing base I'm not sure they'd be embracing measures which would support a EUR exchange rate. I cannot help feeling that, looking forward, it's in Germany exporter's interest to see a suppressed EUR exchange rate. ]]> Mon, 05 Dec 2011 11:18:56 -0500 However what I meant to say was that I think the German industrial base understand that the FUTURE of German export growth is more dependent on countries like China than peripherals and countries like Belgium - which have some serious economic problems of their own.

My general point is, if this was all about German's protecting their precious manufacturing base I'm not sure they'd be embracing measures which would support a EUR exchange rate. I cannot help feeling that, looking forward, it's in Germany exporter's interest to see a suppressed EUR exchange rate. ]]> http://seekingalpha.com/article/311764/comments?source=feed#comment-2083846 2083846
This is not all about Germany trying to bully the rest of Europe. So much is made about how much the powerful South German industrial elite has benefited from a weaker Euro and yet the same representation do not favour ECB money-printing which would be negative to the Euro - boosting export returns.

The fact that we are talking about Treaty Change means that the Germans recognize the EU as a poorly engineered machine which needs re-design. http://bit.ly/w3dmFU ... written months ago. The debate is moving in the right direction (finally) which means so too are the knock-on political negotiations. The question is, given the momentum of political nationalism within Europe over the last 2 years... is this all too late? March 2012 seems like a long way away.]]> Mon, 05 Dec 2011 10:16:36 -0500
This is not all about Germany trying to bully the rest of Europe. So much is made about how much the powerful South German industrial elite has benefited from a weaker Euro and yet the same representation do not favour ECB money-printing which would be negative to the Euro - boosting export returns.

The fact that we are talking about Treaty Change means that the Germans recognize the EU as a poorly engineered machine which needs re-design. http://bit.ly/w3dmFU ... written months ago. The debate is moving in the right direction (finally) which means so too are the knock-on political negotiations. The question is, given the momentum of political nationalism within Europe over the last 2 years... is this all too late? March 2012 seems like a long way away.]]> http://seekingalpha.com/article/311629/comments?source=feed#comment-2083653 2083653 Mon, 05 Dec 2011 09:16:32 -0500 http://seekingalpha.com/article/311629/comments?source=feed#comment-2083641 2083641
I think the Germans realize that Europeans must first admit that the very substance of the EU (e.g. original Maastricht Treaty, Stability and Growth Pact etc) was a poorly engineered machine. My main fear that this is too little too late, we should have been having conversations centered around treaty change (and the knock-one political negotiations which come with this) a long time ago when the open nationalistic wounds were less painful.]]> Mon, 05 Dec 2011 09:12:11 -0500
I think the Germans realize that Europeans must first admit that the very substance of the EU (e.g. original Maastricht Treaty, Stability and Growth Pact etc) was a poorly engineered machine. My main fear that this is too little too late, we should have been having conversations centered around treaty change (and the knock-one political negotiations which come with this) a long time ago when the open nationalistic wounds were less painful.]]> http://seekingalpha.com/article/311629/comments?source=feed#comment-2081844 2081844 Sun, 04 Dec 2011 11:32:07 -0500 http://seekingalpha.com/article/310380/comments?source=feed#comment-2069358 2069358
There are genuine signs of hope with talk of Treaty Change, but this is only one leg of a three-legged solution stool, I think. So I don't think the Euro's demise is over-hyped, when you leave any solution in the hands of European politicians it's not illogical to predict the worst.]]> Tue, 29 Nov 2011 08:59:32 -0500
There are genuine signs of hope with talk of Treaty Change, but this is only one leg of a three-legged solution stool, I think. So I don't think the Euro's demise is over-hyped, when you leave any solution in the hands of European politicians it's not illogical to predict the worst.]]>