Huh? So how do you explain that all the mkt participants, including yours truly, heard of the coming changes yesterday afternoon, well ahead of the official announcement this morning? What the heck do you mean there is no haircut? You're not aware of the terminology used in the repo market for margin? Let me enlighten you... The sort of "margin/capital reserve" you're referring to is called "repo haircut" in the short-term funding mkt. LCH.Clearnet (along w/CCG) is (among other things) a repo clearing house. They have raised haircuts on Italian repo trades that clear through them. It was not "known" that they will do as their stated criteria include, but are not limited to, the yield spread (includes sov CDS levels, ironically). Finally, it's not 4.5% over German debt, but rather a spread to a basket of AAA Eurozone sovereigns (France, Holland, Germany, etc). Anything will help the PIIGS. Generally, could you pls refrain from telling me things about my mkt that you clearly don't know and understand all that well?
OK, I acknowledge that you have understanding, even if that is not immediately clear in the way you write. Still your perjorative use of 'shananigans' and the implied manipulation in comment is not justified. Margins should be increased on Italian Debt and its derivatives. As far as public private...anyone watching CNBC would have understood the likelihood of a margin increase. The only thing that will help the PIIGS is a plan for growth...more debt does not solve any problem. Austerity is not a plan for growth; its a result of not having a plan for growth.
I insist on my use of the word "shenanigans". I believe you may see FSA complaints on this in the not so distant future. Whether it's what should or should not happen is irrelevant. What happened is. I disagree... What will help PIIGS is austerity, a credible plan for growth plus low rates for a long time, as the intra-European iimbalances are allowed to correct.
I'm inclined to agree with that. More to the point, austerity is going to happen no matter what, so better it be done in an intentional, somewhat controlled manner than as a cataclysmic "who, me?" surprise.
Contrary to popular belief a lot of Europeaners would actually welcome an external intervention on their economy as they have witnessed their elected politicians either can't solve it or won't solve it cause they are too linked with their pressure groups, or just too corrupt.
That's the change on day and it's stale. Currently, the yield on the 3M BOTS is arnd 5.8% (although it's anyone's guess how real of a mid this is).
Yeah, thanks for catching that - I realized my mis-reading and attempted to blow away the errant posting.
WTF?! Widened? As in, got worse? WTF?! We keep hearing about their terrible gut wrenching austerity yet they cannot even toe the line - they have to spend more than ever? That's like saying you are on a diet yet you set new records for beer and deep dish pizza consumption. "Well, I was growing my consumption by a pizza and a case every week, but last week I only ate half a pizza and drank a 12 pack more than the previous week. Hey, I am working on it!" LMAO. http://www.bloomberg.com/news/2011-...-in-greek-parliament-to-save-euro-status.html