Posts Tagged ‘European Central Bank’

Council of the European Union demands Sepa migration push…

Posted on 2013 05, 17 by rockingjude

SEPA Textured background

Amid concerns that companies are failing to adequately prepare for February’s Sepa migration deadline, the Council of the European Union has called on member states, banks and end users to redouble their efforts.

At its latest economic and financial affairs meeting, the Council – made up of minsters from EU member states – reiterated its backing for the Sepa (Single euro payments area) project and the upcoming migration deadline for credit transfers and direct debits.

However, the Council observed that some stakeholders seem to be planning for a late Sepa migration and may be exposed to “undue operational risks impacting smooth handling of payments”.

The body “regrets” the slow pace of preparation in most countries and cites a recent ECB report highlighting the particular problems with small and medium enterprises (SMEs) and local public administrations, whose awareness of the programme is still “fragmented and the level of preparedness is rather poor”.

These end-users have to get ready for the switch-over, says the Council, warning that payment orders which are not submitted in the right format from 1 February may not be processed.

For their part, member states should “significantly intensify communication measures” to deal with “public awareness gaps” about Sepa, concludes the Council, proposing the use of the general and business press, billboards and TV and radio advertising.

Banks and other payment service providers also need to step up their efforts to familiarise end-users on technical, business and contractual issues related to Sepa migration and provide assistance for the move. For a start, individual information letters should be sent out to corporate clients.

Sepa migration will be on the agenda when hundreds of payments professionals gather in Berlin next week for EBAday 2013.

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In A Brilliant New Speech, George Soros Reveals The Exact Moment That Angela Merkel Started The Euro Crisis…Big hmmmmm…

Posted on 2012 06, 06 by rockingjude

~r…I would love to see you tear this apart!!!!..and look forward to it…~jude


Joe Weisenthal


George Soros delivered a speech today in Trento, Italy today on the Eurozone crisis and it’s an absolute dynamo.

You really ought to read the whole speech, which is on his personal webpage, as it starts off with an overview of his economic theories (which revolve around the idea that markets are deeply imperfect and prone to turn into bubbles based on human fallability and lack of knowledge) and then nicely explains how all of this explains the current crisis in Europe.

What’s fantastic is that he really gets it from all angles.

This is a really killer characterization of the Eurozone:

I contend that the European Union itself is like a bubble. In the boom phase the EU was what the psychoanalyst David Tuckett calls a “fantastic object” – unreal but immensely attractive. The EU was the embodiment of an open society –an association of nations founded on the principles of democracy, human rights, and rule of law in which no nation or nationality would have a dominant position.

The process of integration was spearheaded by a small group of far sighted statesmen who practiced what Karl Popper called piecemeal social engineering. They recognized that perfection is unattainable; so they set limited objectives and firm timelines and then mobilized the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step. The process fed on its own success, very much like a financial bubble. That is how the Coal and Steel Community was gradually transformed into the European Union, step by step.

The Countdown To The Break Up Of The Euro Has Officially Begun…

Posted on 2012 05, 09 by rockingjude

Courtesy of Michael Snyder of Economic Collapse

 

The results of the elections in France and Greece have made it abundantly clear that there is a tremendous backlash against the austerity approach that Germany has been pushing.  All over Europe, prominent politicians and incumbent political parties are being voted out.  In fact, Nicolas Sarkozy has become the 11th leader of a European nation to be defeated in an election since 2008.  We have seen governments fall in the Netherlands, the UK, Spain, Ireland, Italy, Portugal and Greece.  Whenever they get a chance, the citizens of Europe are using the ballot box to send a message that they do not like what is going on.  It turns out that austerity is extremely unpopular.  But if newly elected politicians all over Europe begin rejecting austerity, this puts Germany in a very difficult position.  Should Germany be expected to indefinitely bail out all of the members of the eurozone that choose to live way beyond their means?  If Germany pulled out of the euro tomorrow, the euro would absolutely collapse, bond yields for the rest of the eurozone would skyrocket to unprecedented heights, and without German bailout money troubled nations such as Greece would be headed directly for default.  The rest of the eurozone is absolutely and completely dependent on Germany at this point.  But as we have seen, much of the rest of the eurozone is sick and tired of taking orders from Germany and is rejecting austerity.  A lot of politicians in Europe apparently believe that they should be able to run up gigantic amounts of debt indefinitely and that the Germans should be expected to always be there to bail them out whenever they need it.  Will the Germans be willing to tolerate such a situation, or will they simply pick up their ball and go home at some point?

Over the past several years, German Chancellor Angela Merkel and French President Nicolas Sarkozy have made a formidable team.  They worked together to push the eurozone on to the path of austerity, but now Sarkozy is out.

EUROZONE SCAM!…The stripping of Democracy…sound familiar?

Posted on 2012 03, 15 by rockingjude

The Euro-zone in its current form is in its final chapter. Anyone who argues otherwise is not paying attention.
Consider the Greek situation. Greece’s debt problems first made mainstream media headline news at the beginning of 2009. The IMF/ EU/ ECB/ and Federal Reserve have been working on this situation for two years now. And they’ve yet to solve anything: after two bailouts, significant debt write-downs, and numerous austerity measures, Greece remains bankrupt.
Now, if the Powers That Be cannot solve Greece’s problems… what makes anyone think that they can address larger, more dangerous issues such as Spain or Italy, etc?
Consider that the world’s central banks staged a coordinated intervention…and Italy’s 10 year is back yielding more than 7% less than two months later.
Again, a coordinated intervention by the world’s central banks bought less than few months’ time for Italy…

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Barclays Says Italy Is Finished: “Mathematically Beyond Point Of No Return”…

Posted on 2012 02, 14 by rockingjude
FRANKFURT AM MAIN, GERMANY - SEPTEMBER 27:  Pe...

Image by Getty Images via @daylife

Euphoria may have returned briefly courtesy of yet another promise for a resignation that will likely not be effectuated for weeks or months, if at all, and already someone has done the math on what the events in the past several days reveal for Italy. That someone is Barcalys, the math is not pretty, and the conclusion is that “Italy is now mathematically beyond point of no return.

Summary from Barclays Capital inst sales:

1) At this point, it seems Italy is now mathematically beyond point of no return

2) While reforms are necessary, in and of itself not be enough to prevent crisis

3) Reason? Simple math–growth and austerity not enough to offset cost of debt

4) On our ests, yields above 5.5% is inflection point where game is over

5) The danger:high rates reinforce stability concerns, leading to higher rates

6) and deeper conviction of a self sustaining credit event and eventual default

7) We think decisions at eurozone summit is step forward but EFSF not adequate

8) Time has run out–policy reforms not sufficient to break neg mkt dynamics

 9) Investors do not have the patience to wait for austerity, growth to work

10) And rate of change in negatives not enuff to offset slow drip of positives

11) Conclusion: We think ECB needs to step up to the plate, print and buy bonds

12) At the moment ECB remains unwilling to be lender last resort on scale needed

13) But frankly will have hand forced by market given massive systemic risk

Hint:Not Good.Sell EUR, Buy Gold

The broader referenced report can be found here.

And the assocaited powerpoint is below:

 

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How to Play the Rescue…

Posted on 2011 12, 06 by rockingjude

~i am posting this article as i lost [*hands down* this August] a debate on whether one should keep some cash on hand…if they missed out on the metals…i do believe i was in fact called “stupid”… lolll~jude ;)

By BEN LEVISOHN And JOE LIGHT

A little coordination can go a long way.

After the Federal Reserve and five other central banks on Wednesday announced a joint effort to support the global financial system, stock markets around the world zoomed. The Dow Jones Industrial Average jumped 4.2%, its largest one-day spike since March 2009.

The question on investors’ minds is whether this latest rally has legs, or whether it will fade away like so many others in the past few months.

History could offer a clue. A Wall Street Journal analysis of market data provided by Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School suggests the central-bank intervention might indeed be a turning point for the markets: U.S. and emerging-market stocks may be poised to outperform, while European stocks could be headed for more trouble. There is enough uncertainty to warrant a healthy dollop of Treasurys and cash in investors’ portfolios as well, for safety.

“There are possible positive catalysts that could paint a constructive picture for equities in 2012,” says Lisa Shalett, chief investment officer at Bank of America Merrill Lynch Global Wealth Management. “But at the same time we’re telling people they need to keep some money in cash until there’s better visibility.”

On Wednesday, the Fed joined with the European Central Bank and the central banks of England, Japan, Canada and Switzerland to make it easier and cheaper for banks to swap foreign currencies for dollars. (Separately, Chinese authorities reduced banks’ reserve requirements in a bid to stimulate lending and boost economic growth.)

As government interventions go, the latest foray isn’t nearly as big as the Fed’s recent bond-buying programs or the Treasury Department’s Troubled Asset Relief Program of 2008. But it did signal that central banks are ready to head off the kind of liquidity crisis that could derail the global financial system.

Coordinated moves like the one on Wednesday are rare but not unprecedented. In 2008, the Fed entered into similar agreements with central banks to arrest a frenzied flight out of just about everything and into dollars. Central banks also moved following the terrorist attacks of Sept. 11, 2001, when damage to New York threatened to wreak havoc on the financial system.

Even as far back as 1931, the global banking community, through the Bank for International Settlements, tried to quell a crisis following the collapse of Vienna’s Credit-Anstalt, then that nation’s largest bank, by providing loans to Austria. The attempt was a case of too little, too late; the crisis soon spread to Germany and elsewhere, worsening the Great Depression.

History suggests the latest intervention could be good for certain asset classes. Over the past 80 years, central banks have joined forces at least seven times during financial crises, albeit in different ways and amid different circumstances from today’s.

On average, U.S. stocks had a real return of 9.1% in the three months following a coordinated intervention, 10.6% after a year and 24.5% after two years, according to the Journal’s analysis of the data provided by Profs. Dimson, Marsh and Staunton. The average annual return for stocks from 1900 to 2010 was 6.3%.

Treasurys, too, produced strong returns. They averaged 7%, 8.5% and 15.2% during the three months, one year and two years following an intervention, respectively, compared with an average annual return of 1.8% from 1900 to 2010.

Some major caveats are in order. The “swap agreements” announced on Wednesday and in 2007-08 don’t compare easily with interventions of the past. Central banks frequently have worked together over the years to prop up currencies—but moves designed to provide liquidity to the global financial system have been less common, notes Michael Bordo, an economics professor at Rutgers University.

“What the Fed did in 2008 was something new,” he says.

The closest parallels may be the international cooperation after the 1998 Russian default, the terrorist strikes of 2001 and the 2008 crisis, says Carmen Reinhart, senior fellow at the Peterson Institute for International Economics. In all those cases, the efforts to provide liquidity prevented a collapse of the financial system in the short run but didn’t solve underlying economic problems.

What’s more, while the average returns have been strong, there has been plenty of variation.

While U.S. stocks were higher three months, one year and two years after the 2008 intervention, investors would have lost 15% in the year following the 2001 intervention and 3.2% after two years.

Still, there are lessons to be gleaned from the past.

First, the closer a market is to the epicenter of a crisis, the less likely it is to post positive returns. European stocks, for example, outpaced U.S. stocks by more than 20 percentage points during the year following the October 2008 intervention.

Likewise, European stocks fell just 6.2% in the year following the 2001 terrorist attacks, compared with a 15% decline for U.S. stocks.

By contrast, U.S. stocks outpaced European shares by nearly 19 percentage points following the attempts to shore up the global financial system after Russia’s default in 1998.

Another important lesson: Interventions don’t always follow a neat pattern for investors. Following the collapse of Credit-Anstalt in 1931, for example, U.S. stock investors lost 51.5% during the next year.

With that in mind, here’s how investors should approach their stock, bond and cash holdings.

 Stocks

U.S. investors often are encouraged to invest more money abroad. They might want to tread carefully now.

The Standard & Poor’s 500-stock index has lost just 1% this year, compared with a 13.5% drop for Europe’s Stoxx 600 index. Meanwhile, the companies in the S&P 500 with the least international exposure have outperformed those with the most exposure by 7.1 percentage points, according to BofA Merrill Lynch.

The U.S. might keep outperforming, says Sam Katzman, chief investment officer at Constellation Wealth Advisors in New York. “If anyone can shelter themselves from what’s going on internationally, it’s the U.S.,” he says. “Money that might have been flowing to Europe might be flowing here.”

The U.S. economy has held up comparatively well thus far. On Friday, the U.S. Labor Department reported the unemployment rate for November fell by 0.4 percentage point from October to 8.6%, the lowest in nearly three years.

Yet with the risks still high, investors should focus their stock purchases on areas that provide relative safety, some strategists say. That means dividend-paying stocks, which have beaten non-dividend-paying stocks by 7.8 percentage points this year.

Growth companies whose earnings are rising steadily might be worth a look as well. “We see value in technology stocks,” says Emily Sanders, chairman and CEO of Sanders Financial Management in Norcross, Ga. “But we’re not jumping in with both feet for clients.”

European stocks might be tempting given this year’s slump. But the economic outlook remains cloudy. The euro zone’s purchasing-managers index, a gauge of manufacturing activity, fell in November to a level consistent with a 1% quarterly drop in gross domestic product, according to research firm Capital Economics.

Emerging markets are another story. Although they have been punished when they have been at the center of market crises, they have performed much better during recent crises.

In the year after the 1997 devaluation of the Thai baht, for example, emerging-market stocks lost almost a quarter of their value. But a decade later, in the year after the 2008 global intervention, they returned 89%.

Many emerging markets, especially those in Asia, may be more insulated from the European crisis than investors think, says Brad Durham, managing director of EPFR Global.

“We believe emerging markets have bottomed,” says Ms. Shalett of BofA Merrill Lynch. She recommends investors target emerging markets stocks in Asia and Latin America, while avoiding markets more exposed to the European crisis, such as those in Hungary, Poland and the Czech Republic.

 Cash and Bonds

Even though the central bank intervention has eased short-term concerns, the European common currency’s long-term picture remains cloudy, says Gary Richardson, an economics professor at the University of California, Irvine.

“Central banks around the world don’t have many arrows left in the quiver,” he says. “It looks like they hit the bull’s-eye for now, but what happens if that optimism fades?”

Aaron Schindler, a financial planner at Wealth Advisory Group in New York, recommends keeping as much as 30% of your portfolio in cash or a safe short-term bond fund, such as Vanguard Short-Term Bond Index.

Keeping some dry powder also gives you room to buy once the economic outlook becomes clearer, says Ms. Shalett.

For the bond segment of your portfolio, history shows that U.S. Treasurys have tended to pay off nicely following a central-bank intervention, no matter how stocks performed.

In the two years after September 1936, for example, when the country was in the depths of the Depression, U.S. stocks fell 16.6% in real terms, while Treasury bonds rose 5.6%.

The biggest potential for gains in fixed income could be in bonds of emerging-market countries, says Mr. Durham. The iShares JPMorgan USD Emerging Markets Bond ETF dropped 1.3% in November, but in the last week it has gained nearly 2%, and is up 5.7% this year. Mr. Durham says investor flows into emerging-market funds, which his firm tracks, suggest that trend could continue.

“[This year's performance] is a sign that they’re seen as a safe haven from what’s happening in Europe and other developed markets,” he says.

http://online.wsj.com/article/SB10001424052970204397704577074121282629882.html 

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Finextra Research – industry intelligence for the financial technology community…

Posted on 2011 12, 01 by rockingjude

 

MOVENBANK BIDS TO ALLAY FACEBOOK LOGIN CONCERN

Responding to user concerns, start-up Movenbank has moved to allay privacy and security fears over its use of Facebook for registration and log-in to the site.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23207

PRE-PAID CONTACTLESS WRISTWATCH LAUNCHED
MasterCard has teamed up with manufacturer Laks and issuer Vincento to launch a wristwatch featuring PayPass contactless payments technology.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23210

RBS CLOSES BRISTOL SITE
Royal Bank of Scotland (RBS) is closing a customer support centre in Bristol, with the loss of 330 jobs.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23209

T2S ENTERS MAKE-OR-BREAK PHASE AS ECB DOLES OUT INCENTIVES FOR PARTICIPATION
The European Central Bank is to offer ‘early bird’ incentives to central securities depositories that sign up to the Target 2 Securities (T2S) platform, as the controversial project to streamline the Euro area’s securities settlements systems reaches a critical make-or-break stage in its development.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23208

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Barclays Says Italy Is Finished: “Mathematically Beyond Point Of No Return”…

Posted on 2011 11, 09 by rockingjude

Submitted by Tyler Durden on 11/08/2011 20:13 -0500

Euphoria may have returned briefly courtesy of yet another promise for a resignation that will likely not be effectuated for weeks or months, if at all, and already someone has done the math on what the events in the past several days reveal for Italy. That someone is Barcalys, the math is not pretty, and the conclusion is that “Italy is now mathematically beyond point of no return.Summary from Barclays Capital inst sales:

1) At this point, it seems Italy is now mathematically beyond point of no return 2) While reforms are necessary, in and of itself not be enough to prevent crisis 3) Reason? Simple math–growth and austerity not enough to offset cost of debt

4) On our ests, yields above 5.5% is inflection point where game is over

5) The danger:high rates reinforce stability concerns, leading to higher rates

6) and deeper conviction of a self sustaining credit event and eventual default

7) We think decisions at eurozone summit is step forward but EFSF not adequate

8) Time has run out–policy reforms not sufficient to break neg mkt dynamics  

9) Investors do not have the patience to wait for austerity, growth to work

10) And rate of change in negatives not enuff to offset slow drip of positives

11) Conclusion: We think ECB needs to step up to the plate, print and buy bonds

12) At the moment ECB remains unwilling to be lender last resort on scale needed

13) But frankly will have hand forced by market given massive systemic risk Hint:Not Good.Sell EUR, Buy Gold

The broader referenced report can be found here. And the assocaited powerpoint is below:

http://www.zerohedge.com/news/barclays-says-italy-finished-mathematically-beyond-point-no-return 

 

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Greek politicians in talks over PM and unity government…

Posted on 2011 11, 07 by rockingjude

Greek political leaders have resumed talks on appointing a new PM and interim coalition government.

They hope to clear the way for an EU bailout package which would save Greece from imminent bankruptcy.

PM George Papandreou agreed to stand down after days of upheaval caused by his call – now revoked – for a referendum on accepting the bailout.

Greece is under huge international pressure to resolve its political crisis, in order to calm the markets.

Eurozone finance ministers meeting are in Brussels on Monday, adding pressure on Greece to find an early solution to the political deadlock.

The Greek socialist government and opposition conservatives are now in discussions on what framework the unity government will have.

Mr Papandreou is to remain in post for now but will stand down once the new government is formed.

The names of Lucas Papademos, a former deputy president of the European Central Bank (ECB), and Finance Minister Evangelos Venizelos have been floated as potential candidates to be prime minister.

Greece’s new political roadmap envisages elections being held – possibly on 19 February – once the new government has approved an EU bailout package.

EU leaders seal Greek debt deal…and Rome is happy…

Posted on 2011 10, 26 by rockingjude
FRANKFURT AM MAIN, GERMANY - SEPTEMBER 27:  Pe...

Image by Getty Images via @daylife

~Don’t let this deceive you, as the markets will be happy~jude

EUROPEAN leaders secured a deal to reduce Greece’s debt after labouring deep into today to find agreement on what they had billed as a blockbuster package aimed at stemming the continent’s debt crisis.

French President Nicolas Sarkozy said after the marathon negotiating session the leaders had reached agreement with private banks on a “voluntary” 50 per cent reduction of Greece’s debt in the hands of private investors.

He also said they had agreed to expand the firepower of the European Financial Stability Facility, the eurozone’s bailout vehicle, four-or-five-fold — suggesting it could provide guarantees for €800 billion to €1.3 trillion of bonds issued by countries like Spain and Italy.

The leaders agreed on a plan that would boost the capital buffers of the stragglers among the continent’s 70 biggest banks by €106bn — though they didn’t say where the money would come from.

As the leaders went into the meeting, deep divisions had remained between eurozone governments and private banks over how much to cut the government debt of Greece, the country at the heart of the crisis. Without a final deal on Greece — in particular on how deep the losses holders of Greek government bonds are expected to suffer — it would have been impossible to say how big the expanded firepower of the bailout fund could be.


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