"Economist Nouriel Roubini on Wednesday voiced concern over a compromise on extending tax cuts struck by US President Barack Obama and Republican leaders, saying the agreement could expose the US to bond vigilantes who will drive up bond yields."
in CNBC
Related ETFs: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT) , iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT), iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF)
Dec 7, 2010
China`s Inflation Outlook.
China’s food prices look to be peaking, with vegetable prices falling in the second half of November after government efforts to boost supplies and impose price caps took effect. Still, the CPI last month increased at its fastest pace in more than two years. The two required reserve ratio (RRR) hikes in November resulted in some acute liquidity shortages toward the end of the month, but these appear to have dissipated in the first week of December. We expect the central bank to hike interest rates by 25 basis points (bps) in the coming weeks.
in RGE.com
Related: iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), PowerShares Gld Drg Haltr USX China(ETF) (NYSE:PGJ), Morgan Stanley China A Share Fund, Inc. (NYSE:CAF)
in RGE.com
Related: iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), PowerShares Gld Drg Haltr USX China(ETF) (NYSE:PGJ), Morgan Stanley China A Share Fund, Inc. (NYSE:CAF)
The US Real Estate Market Is Double Dipping
"The United States real estate market, for sure, is double dipping. The apparent increase in prices has been fully reversed, demand is falling, and supply is going to increase.”
in New York Times
Related: iShares Dow Jones US Home Const. (ETF) (NYSE:ITB), Lennar Corporation (NYSE:LEN), D.R. Horton, Inc. (NYSE:DHI), Bank of America Corporation (Public, NYSE:BAC), Citigroup Inc. (NYSE:C) , JPMorgan Chase & Co. (Public, NYSE:JPM), Huntington Bancshares Incorporated (NASDAQ:HBAN)
in New York Times
Related: iShares Dow Jones US Home Const. (ETF) (NYSE:ITB), Lennar Corporation (NYSE:LEN), D.R. Horton, Inc. (NYSE:DHI), Bank of America Corporation (Public, NYSE:BAC), Citigroup Inc. (NYSE:C) , JPMorgan Chase & Co. (Public, NYSE:JPM), Huntington Bancshares Incorporated (NASDAQ:HBAN)
Dec 6, 2010
There's Not Going To Be Anybody Coming From Mars Or The Moon To Bail Out The IMF Or The Eurozone
"We started with private debt, we socialized it and it became public debt. Now we have sovereigns in trouble being bailed out by essentially super sovereigns, IMF, euro zone, EU. But there's not going to be anybody coming from Mars or the moon to bail out the IMF or the eurozone."
in Reuters Insider
Related: SPDR S&P 500 ETF (NYSE:SPY), iShares Russell 2000 Index (ETF) (NYSE:IWM), iShares MSCI United Kingdom Index (ETF) (NYSE:EWU), iShares MSCI Spain Index (ETF) (NYSE:EWP)
in Reuters Insider
Related: SPDR S&P 500 ETF (NYSE:SPY), iShares Russell 2000 Index (ETF) (NYSE:IWM), iShares MSCI United Kingdom Index (ETF) (NYSE:EWU), iShares MSCI Spain Index (ETF) (NYSE:EWP)
Dec 3, 2010
A Spanish Inquisition.
With Ireland's financial woes exposed, Spain's similarities warrant inspection.
Contagion has taken hold of Spain, with respect to both the sovereign and the banking system, in the wake of Ireland's financial troubles and bailout application. In contrast with Greece, where the key vulnerabilities are in the public sector, both Spain and Ireland have run up large private sector imbalances following real estate booms and busts. In "Comparing Spain With Ireland and Other PIIGS: Better in Some Ways, More at Risk in Others," available exclusively to clients, we shed light on Spain's balance sheet vulnerabilities to assess liquidity and solvency risks in comparison with Ireland and the other PIIGS (Italy, Greece and Portugal).
Spain shares some of Ireland's key vulnerabilities, including a housing bubble more pronounced than that in the U.S. and large nonperforming loan overhang in the banking sector. Though Spain's housing bubble is less severe than Ireland's, and though the Spanish banks' commendable loan-loss provisioning system is providing a buffer, a comparison of price-to-rent ratios shows that the bulk of the housing price correction and loss recognition has not yet come. Thus, the pressure on the banking system is bound to increase going forward.
Plus, unlike Ireland, Spain's economy is subject to structural rigidities that prevent a fast return to growth and a quick competitiveness adjustment through internal devaluation. While this year's fiscal performance is largely on track, the 2011 fiscal target of 6% will be more challenging amid fiscal austerity. In some dimensions Spain's macro and financial fundamentals (for example, national savings and public debt levels) are better than those of other periphery countries. But in many dimensions, fundamentals are worse and financial vulnerabilities more severe (for example, unemployment and financing needs).
As the flow of excess savings from abroad has receded after the investment bust, Spain's private losses are being socialized, with dire consequences for the public sector balance sheet--although not to the same extent as in Ireland. Ireland's outsized banking sector in comparison to GDP and its decision to stand behind banks that are too big for it alone to save have accelerated the unsustainable debt dynamics. But one must ask: Is Spain in a fundamentally different situation? Investors seemed willing to give Spain the benefit of the doubt, but market dynamics since Ireland's application for external support show that a reassessment is taking place.
If the current liquidity pressures don't abate and Spain, alongside Ireland and possibly Portugal, is forced to turn to the E.U. funding mechanism, the 500 billion euros of E.U. resources (in addition to the not-yet-committed 250 billion euros in potential IMF funds) would be strained. With Spain too big to fail but also effectively too big to save, a bailout request would open the door to speculation against the cohesion of the eurozone. Indeed, German Bundesbank President Axel Weber's comment that the 500 billion euro bailout fund could be increased if necessary to prevent a breakup of the currency union shows that this concern is shared among even the most vocal bailout skeptics.
The alternative to a bailout is a bail-in of private investors. The inclusion of collective action clauses on new debt issues starting in mid-2013, as part of the new European Stabilization Mechanism, is meant to facilitate this process in those cases where insolvency has been established. While useful, such legal technology is not necessary to achieve an orderly restructuring of sovereign debt--previous instances illustrate that market-based restructurings via exchange offers are sufficient.
Elisa Parisi-Capone is a senior analyst for finance, banking and Western Europe with Roubini Global Economics, Christian Menegatti is the head of global research and Nouriel Roubini is the chairman.
Related: iShares MSCI Spain Index (ETF) (NYSE:EWP), Telefonica S.A. (ADR) (Public, NYSE:TEF) , Banco Santander, S.A. (ADR) (NYSE:STD) , Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), Repsol YPF, S.A. (ADR) (NYSE:REP) , Banco Popular Espanol SA (MCE:POP), Inditex SA (MCE:ITX) , Gas Natural SDG SA (MCE:GAS)
Contagion has taken hold of Spain, with respect to both the sovereign and the banking system, in the wake of Ireland's financial troubles and bailout application. In contrast with Greece, where the key vulnerabilities are in the public sector, both Spain and Ireland have run up large private sector imbalances following real estate booms and busts. In "Comparing Spain With Ireland and Other PIIGS: Better in Some Ways, More at Risk in Others," available exclusively to clients, we shed light on Spain's balance sheet vulnerabilities to assess liquidity and solvency risks in comparison with Ireland and the other PIIGS (Italy, Greece and Portugal).
Spain shares some of Ireland's key vulnerabilities, including a housing bubble more pronounced than that in the U.S. and large nonperforming loan overhang in the banking sector. Though Spain's housing bubble is less severe than Ireland's, and though the Spanish banks' commendable loan-loss provisioning system is providing a buffer, a comparison of price-to-rent ratios shows that the bulk of the housing price correction and loss recognition has not yet come. Thus, the pressure on the banking system is bound to increase going forward.
Plus, unlike Ireland, Spain's economy is subject to structural rigidities that prevent a fast return to growth and a quick competitiveness adjustment through internal devaluation. While this year's fiscal performance is largely on track, the 2011 fiscal target of 6% will be more challenging amid fiscal austerity. In some dimensions Spain's macro and financial fundamentals (for example, national savings and public debt levels) are better than those of other periphery countries. But in many dimensions, fundamentals are worse and financial vulnerabilities more severe (for example, unemployment and financing needs).
As the flow of excess savings from abroad has receded after the investment bust, Spain's private losses are being socialized, with dire consequences for the public sector balance sheet--although not to the same extent as in Ireland. Ireland's outsized banking sector in comparison to GDP and its decision to stand behind banks that are too big for it alone to save have accelerated the unsustainable debt dynamics. But one must ask: Is Spain in a fundamentally different situation? Investors seemed willing to give Spain the benefit of the doubt, but market dynamics since Ireland's application for external support show that a reassessment is taking place.
If the current liquidity pressures don't abate and Spain, alongside Ireland and possibly Portugal, is forced to turn to the E.U. funding mechanism, the 500 billion euros of E.U. resources (in addition to the not-yet-committed 250 billion euros in potential IMF funds) would be strained. With Spain too big to fail but also effectively too big to save, a bailout request would open the door to speculation against the cohesion of the eurozone. Indeed, German Bundesbank President Axel Weber's comment that the 500 billion euro bailout fund could be increased if necessary to prevent a breakup of the currency union shows that this concern is shared among even the most vocal bailout skeptics.
The alternative to a bailout is a bail-in of private investors. The inclusion of collective action clauses on new debt issues starting in mid-2013, as part of the new European Stabilization Mechanism, is meant to facilitate this process in those cases where insolvency has been established. While useful, such legal technology is not necessary to achieve an orderly restructuring of sovereign debt--previous instances illustrate that market-based restructurings via exchange offers are sufficient.
Elisa Parisi-Capone is a senior analyst for finance, banking and Western Europe with Roubini Global Economics, Christian Menegatti is the head of global research and Nouriel Roubini is the chairman.
Related: iShares MSCI Spain Index (ETF) (NYSE:EWP), Telefonica S.A. (ADR) (Public, NYSE:TEF) , Banco Santander, S.A. (ADR) (NYSE:STD) , Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), Repsol YPF, S.A. (ADR) (NYSE:REP) , Banco Popular Espanol SA (MCE:POP), Inditex SA (MCE:ITX) , Gas Natural SDG SA (MCE:GAS)
Spain Is Too Big To Fail, Too Big To Be Saved.
"Spain is too big to fail but also too big to be saved or too big to be bailed out. Official funds aren't currently enough to bailout Spain."
in Twitter
Related: iShares MSCI Spain Index (ETF) (NYSE:EWP), Telefonica S.A. (ADR) (Public, NYSE:TEF) , Banco Santander, S.A. (ADR) (NYSE:STD) , Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), Repsol YPF, S.A. (ADR) (NYSE:REP) , Banco Popular Espanol SA (MCE:POP), Inditex SA (MCE:ITX) , Gas Natural SDG SA (MCE:GAS)
in Twitter
Related: iShares MSCI Spain Index (ETF) (NYSE:EWP), Telefonica S.A. (ADR) (Public, NYSE:TEF) , Banco Santander, S.A. (ADR) (NYSE:STD) , Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), Repsol YPF, S.A. (ADR) (NYSE:REP) , Banco Popular Espanol SA (MCE:POP), Inditex SA (MCE:ITX) , Gas Natural SDG SA (MCE:GAS)
Dec 2, 2010
Advanced Economies Will Have To Spend Less, Consume Less, Import Less
“Advanced economies will have to spend less, consume less, import less and save more for years to put the economy back on track. The monetary easing came after inflation readings stood below the central bank’s target.”
in Taipei Times
Related: SPDR S&P 500 ETF (NYSE:SPY), iShares Russell 2000 Index (ETF) (NYSE:IWM), iShares MSCI United Kingdom Index (ETF) (NYSE:EWU), iShares MSCI Spain Index (ETF) (NYSE:EWP)
in Taipei Times
Related: SPDR S&P 500 ETF (NYSE:SPY), iShares Russell 2000 Index (ETF) (NYSE:IWM), iShares MSCI United Kingdom Index (ETF) (NYSE:EWU), iShares MSCI Spain Index (ETF) (NYSE:EWP)
China`s Inflation And Asset Bubbles.
"Today China is overheating, inflation is rising, there is excessive monetary growth, excessive credit growth, beginning of asset bubbles. One of the ways which China can control this risk is to allow a faster rate of appreciation of the currency."
in Bloomberg.com
Related: IShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI) , Morgan Stanley China A Share Fund, Inc. (NYSE:CAF) , PowerShares Gld Drg Haltr USX China(ETF) (NYSE:PGJ) , Baidu.com, Inc. (ADR) (NASDAQ:BIDU) , Sohu.com Inc. (NASDAQ:SOHU), Aluminum Corp. of China Limited (ADR) (NYSE:ACH)
in Bloomberg.com
Related: IShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI) , Morgan Stanley China A Share Fund, Inc. (NYSE:CAF) , PowerShares Gld Drg Haltr USX China(ETF) (NYSE:PGJ) , Baidu.com, Inc. (ADR) (NASDAQ:BIDU) , Sohu.com Inc. (NASDAQ:SOHU), Aluminum Corp. of China Limited (ADR) (NYSE:ACH)
Dec 1, 2010
Contagion Is Spreading From Ireland To Spain.
"Contagion is spreading from Ireland to Spain, which shares some key vulnerabilities in the wake of its real estate boom/bust and large non-performing loan overhang in the banking sector. A house price comparison shows that the housing bubble in Spain was more pronounced than in the United States but less pronounced than in Ireland."
in roubini.com
in roubini.com
There Is Financial Contagion In Europe.
“There’s now financial contagion in Portugal, Spain and to a smaller degree even in countries like Italy, Belgium and others in the euro zone.”
Nouriel Roubini, in a speech to a conference in Taipei today
Nouriel Roubini, in a speech to a conference in Taipei today
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