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Archive | March, 2010

What happens when the FED stops buying mortgages?

April 1st the FED stops buying (MBS) Mortgage Backed Securities. It has been buying them up relentlessly since January ’09. So far $1.25 Trillion’s worth. What happens when they stop? The way it used to work was banks gave out a mortgage. The banks then needed/wanted to sell-on those mortgages, in order to get more […]

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Bondzilla yawns and Greece craps itself.

Greece is in trouble and its getting worse. The bonds it only-just managed to sell Monday, got dumped Tuesday. So many of Monday’s buyers wanted rid of them one day later, they were selling them for less than they paid for them. For those who want to know the ‘yield’ (It’s like the interest but […]

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Resistance is futile

You know who I think is behind the inexorable rise in the stock markets, despite such a rise making NO SENSE AT ALL in terms of the underlying fundamentals of sales, consumption, debt levels, profit and dividend? – the Borg! No really. I think the Borg are working at the Proprietary Trading desks of the […]

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Euroland – they’re not green shoots they’re Tulips.

This year alone Greece has to sell €54B AND refinance another €20B. Yesterday the Greek government offered just €5B in seven year bonds – to test the water. The bonds offered 6% which is twice the rate a bond buyer would get if she bought German bonds. So as long as you think euro land […]

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Oz and China – speculators paradise.

Just a quick further note about Australia’s property boom and China’s role in it. I think events in China are going to cause a year or so of super-property inflation in Australia. Greed and stupidity will combine as they always do, everywhere, to convince those making the most money that it will never end. And […]

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More mortgage losses.

Several months ago on the Guardian and more recently here, I argued that the much discussed ‘stimulus exit strategies’ would just not appear. The central banks, I argued, could not withdraw any part of their stimulus because without that cash , there simply has not been and will not be any recovery. There has been […]

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Forecasts of growth

Do you what the last resort of the debtor is? It is his assurance that he has a sure fire winner in the 3.30 this afternoon. So don’t worry, he’s good for it! That is essentially what Darling said to the country today. Don’t worry about my debts. I have looked into the future and […]

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China – the big change.

A week ago I was commenting on the Guardian about how China’s exports AND its imports had declined massively in February – 25.7% and 24% respectively. I thought this might indicate China was focusing on building an internal market to rebalance it over-reliance on exports. Now news comes that China may be about to post […]

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Liars Lexicon

“Repo” – repurchase and resale agreement. Lehman did it. Lloyds still does do it. So what is it? Repo is agreeing with another party that you will ‘sell’ them something they agree to sell back to you at an agreed price on an agreed date. It’s not complicated, only, on the face of it, seemingly […]

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Greece and Germany – how it might play out.

Only the players on the pitch really have any idea of what they are thinking and how this will play out. But here is what I think. Merkel and Germany have made it clear that they have their eyes on the longer game. After Greece comes Spain, Italy and Portugal. Spain particularly is headed, I […]

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