Sunday, January 29, 2012

Ever wondered why NRE deposit rates were freed?

Just have a look at the credit deposit ratio chart. It's the highest in 35 years.

Saturday, September 10, 2011

ECB bought another 13.3 bill euros

The European Central Bank says it spent euro13.3 billion ($18.7 billion) last week ending sep 4 purchasing government bonds in an attempt to keep the continent's debt crisis from pushing Italy and Spain into financial collapse.


Now the total amount of purchases by ECB amounts to 130 billion euros. With 22bil, 14 bil, 6 bil, 13.3 bil in four weeks it has now spent 55 bil euros (increasing the amount spent by 70%) in a matter of four weeks. Note that ECB started buying bonds in the market around 13 months ago!

At this rate the bailout fund of 440 bil euros will get exhausted in 28 weeks!! not counting the collateral that it needs to hold and the fact the bond yields are still rising even with purchases. If adjusted the money will last for only few months.

Thursday, September 08, 2011

Greece - 91% chance of default

Credit-default swaps on Greek government debt surged to a record, signaling a 91 percent chance the nation will fail to meet debt commitments, after its economy shrank more than previously reported.

Five-year contracts on the country’s sovereign bonds jumped 196 basis points to 3,001 basis points, at 3:45 p.m. in London, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

Via Bloomberg

Does that remaining 9% really matter especially with today's fractional reserve systems used by financial institutions all over the world not only Greece.

Swiss Franc pegged to euro

The Swiss National Bank devalued the franc, pledging to buy "unlimited quantities" of foreign currencies to force down its value. The SNB warned that it would no longer allow one Swiss franc to be worth more than €0.83 – equivalent to SFr1.20 to the euro – having watched the two currencies move closer to parity as Switzerland became a "safe haven" from the ravages of the eurozone crisis.

Via Guardian

Another safe heaven lost. Gold is slowly becoming the safest asset against currency devaluations and money printing all over the world.