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First World Markets Shenanigans
VituVingiSana
#81 Posted : Wednesday, March 18, 2020 9:26:02 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,056
Location: Nairobi
rwitre wrote:
slick wrote:
FED TO NOW BUY COMMERCIAL PAPER WHERE THE MARKET HAD FROZEN UP

slick wrote:
slick wrote:
US COMMERCIAL PAPER MARKET FREEZES UP!!smile smile

Two weeks ago the corporate bond market froze up.Treasuries had record bid/ask prices with the 30 year auction nearly failing last week needing a Fed intervention.Now the commercial paper market has frozen up needing a Fed bailout.



https://www.ft.com/conte...-11ea-a3c9-1fe6fedcca75

It just keeps getting worse.The Fed will just have to buy everything.Now US banks wont be engaging in share buybacks putting even more pressure on stocks


Wow everyday new twists and records.The Dow Jones Industrial Average and S&P 500 had their worst day since the “Black Monday” crash of 1987, falling 12.93% and 11.98%, respectively. Also all the 3 indices recorded their biggest point drops ever.The Nasdaq Composite had its biggest one-day percentage plunge ever, tumbling 12.32%.

All this carnage despite the Fed cutting rates by 1% to Fed funds rate being between 0-0.25% and launching 700 billion of QE and undertaking 500 billion of overnight repos and 45 billion of 2 week repos.Just getting too insane.

Now futures market are up with Dow futures up 700 points when Trump indicated a bailout is coming.Looks very tempting to short that dead cat bounce.So where will the bailout cash come from?Simple.The Fed will just print the money as always.




As widely expected,Fed has launched a commercial paper facility to buy this market that has been frozen under distress for the last few days.Intention is to buy at least 1 trillion of commercial paper





Should our CBK have bought Nakumatt's commercial paper also to save it from collapse and prevent the distress in Amana Capital also?


"Cash is trash." Ray Dalio

Even Warren Buffet's $128 billion cash pile is about to become worth less value than it was 2 weeks ago- but he has probably used a huge chunk to buy stock during the recent dip.
How would it worth less except for inflation?
I think most of the cash is in high quality (mostly Fed) ST paper. And with rates down to 0-0.25%, even the LT bonds might have gained value. It is likely he will deploy the cash!!!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
lochaz-index
#82 Posted : Wednesday, March 18, 2020 9:39:19 AM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
VituVingiSana wrote:
rwitre wrote:
slick wrote:
FED TO NOW BUY COMMERCIAL PAPER WHERE THE MARKET HAD FROZEN UP

slick wrote:
slick wrote:
US COMMERCIAL PAPER MARKET FREEZES UP!!smile smile

Two weeks ago the corporate bond market froze up.Treasuries had record bid/ask prices with the 30 year auction nearly failing last week needing a Fed intervention.Now the commercial paper market has frozen up needing a Fed bailout.



https://www.ft.com/conte...-11ea-a3c9-1fe6fedcca75

It just keeps getting worse.The Fed will just have to buy everything.Now US banks wont be engaging in share buybacks putting even more pressure on stocks


Wow everyday new twists and records.The Dow Jones Industrial Average and S&P 500 had their worst day since the “Black Monday” crash of 1987, falling 12.93% and 11.98%, respectively. Also all the 3 indices recorded their biggest point drops ever.The Nasdaq Composite had its biggest one-day percentage plunge ever, tumbling 12.32%.

All this carnage despite the Fed cutting rates by 1% to Fed funds rate being between 0-0.25% and launching 700 billion of QE and undertaking 500 billion of overnight repos and 45 billion of 2 week repos.Just getting too insane.

Now futures market are up with Dow futures up 700 points when Trump indicated a bailout is coming.Looks very tempting to short that dead cat bounce.So where will the bailout cash come from?Simple.The Fed will just print the money as always.




As widely expected,Fed has launched a commercial paper facility to buy this market that has been frozen under distress for the last few days.Intention is to buy at least 1 trillion of commercial paper





Should our CBK have bought Nakumatt's commercial paper also to save it from collapse and prevent the distress in Amana Capital also?


"Cash is trash." Ray Dalio

Even Warren Buffet's $128 billion cash pile is about to become worth less value than it was 2 weeks ago- but he has probably used a huge chunk to buy stock during the recent dip.
How would it worth less except for inflation?
I think most of the cash is in high quality (mostly Fed) ST paper. And with rates down to 0-0.25%, even the LT bonds might have gained value. It is likely he will deploy the cash!!!

Saying WB cash pile is worth much less is not factually correct. Most assets have depreciated against the USD in this three week period. Dollar index is now poised to punch above 100 which would be a three year high. Assuming that it is held entirely in cash, the purchasing power of it has increased.
The main purpose of the stock market is to make fools of as many people as possible.
slick
#83 Posted : Wednesday, March 18, 2020 9:41:33 AM
Rank: Member


Joined: 6/1/2017
Posts: 288
rwitre wrote:
slick wrote:
FED TO NOW BUY COMMERCIAL PAPER WHERE THE MARKET HAD FROZEN UP

slick wrote:
slick wrote:
US COMMERCIAL PAPER MARKET FREEZES UP!!smile smile

Two weeks ago the corporate bond market froze up.Treasuries had record bid/ask prices with the 30 year auction nearly failing last week needing a Fed intervention.Now the commercial paper market has frozen up needing a Fed bailout.



https://www.ft.com/conte...-11ea-a3c9-1fe6fedcca75

It just keeps getting worse.The Fed will just have to buy everything.Now US banks wont be engaging in share buybacks putting even more pressure on stocks


Wow everyday new twists and records.The Dow Jones Industrial Average and S&P 500 had their worst day since the “Black Monday” crash of 1987, falling 12.93% and 11.98%, respectively. Also all the 3 indices recorded their biggest point drops ever.The Nasdaq Composite had its biggest one-day percentage plunge ever, tumbling 12.32%.

All this carnage despite the Fed cutting rates by 1% to Fed funds rate being between 0-0.25% and launching 700 billion of QE and undertaking 500 billion of overnight repos and 45 billion of 2 week repos.Just getting too insane.

Now futures market are up with Dow futures up 700 points when Trump indicated a bailout is coming.Looks very tempting to short that dead cat bounce.So where will the bailout cash come from?Simple.The Fed will just print the money as always.




As widely expected,Fed has launched a commercial paper facility to buy this market that has been frozen under distress for the last few days.Intention is to buy at least 1 trillion of commercial paper





Should our CBK have bought Nakumatt's commercial paper also to save it from collapse and prevent the distress in Amana Capital also?


"Cash is trash." Ray Dalio

Even Warren Buffet's $128 billion cash pile is about to become worth less value than it was 2 weeks ago- but he has probably used a huge chunk to buy stock during the recent dip.


Fundamentally cash is trash considering the trillions of dollars the Fed is printing daily in even larger schemes to pump up markets but psychologically the US Dollar is king.Despite the trillions being pumped daily,the USD rose and has been remarkably stable.How is this possible?The US Dollar is the world's reserve currency backed by the US superpower status and petrodollar system.Most central bank reserves and most global trade is in USD and lots of debt especially in the emerging and frontier markets are USD denominated debt.This creates a massive constant massive demand for dollars.The current implosion of markets is creating a deflationary spiral making the USD even more sought after despite the trillions being printed.Foreign markets especially European banks are USD strapped thus Fed has setup currency swap lines with European Central Bank to reliquify the European banks with dollars.There is at least 11 trillion of USD denominated foreign debt where interest and principal payments have to still be made so there foreign nations are desperately seeking dollars to make their debt payments.Mainstream investors panicking put of asset classes like stocks are reverting to cash making the demand of dollars even stronger.Investors see no alternative to put their money in USD since the other major currencies facing even more dire straits.Would you park your money in the Euro,Yen when the Eurozone and Japan have negative central bank rates and negative yielding bonds?The British Pound is too small a market and the Chinese also printing money in droves and would you park your cash in a Communist dictatorship where the Yuan isnt a fully convertible currency?Thus in the short term the USD remains King but long term this money printing shenanigans will result in massive decline in the greenback.

As it now the norm,everyday the markets create a new twist.Apart from the massive repos and QE liquidity injections now running at at least a trillion a day,the Fed will print an least an extra 1 trillion to bailout the commercial paper market.Above this,there is now fiscal stimulus.Trump and Treasury Secretary Mnuchin announced sweeping bailout measures that will incur over 1 trillion



An administration official said the package could include:

$500 billion to $550 billion in direct payments or tax cuts
$200 billion to $300 billion in small business assistance
$50 billion to $100 billion in airline and industry relief

Every American (except millionaires and billionaires) will each get 1,000 USD each immediately



They are also deffering tax payments by 90 days




So where are all these trillions for bailouts coming from.Simple the Fed will just create the money from nothing (keystrokes in computer screens to credit the commercial bank and corporate accounts)

Stock market closed higher yesterday due to these massive money printing packages but now open lower with futures yet again hitting limit down and futures trading is halted



WOOOOI!!Sad Sad Sad

Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
wukan
#84 Posted : Wednesday, March 18, 2020 10:31:08 AM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,569
At this rate they will limit trading hours.
lochaz-index
#85 Posted : Wednesday, March 18, 2020 10:43:27 AM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
For those short selling various European markets, shorting has been banned entirely or on select stocks in Italy, Spain, France and the UK. Expect more countries to follow. Best migrate those shorts to the respective indices of interest.
The main purpose of the stock market is to make fools of as many people as possible.
slick
#86 Posted : Wednesday, March 18, 2020 10:59:43 AM
Rank: Member


Joined: 6/1/2017
Posts: 288
lochaz-index wrote:
For those short selling various European markets, shorting has been banned entirely or on select stocks in Italy, Spain, France and the UK. Expect more countries to follow. Best migrate those shorts to the respective indices of interest.


Yeah I noticed that also yesterday.At this rate US may also ban short selling.In 2008 after the Lehman blowup they temporarily banned short selling on 799 financial stocks




Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
amorphous
#87 Posted : Wednesday, March 18, 2020 12:28:42 PM
Rank: Member


Joined: 5/15/2019
Posts: 671
Location: planet earth
Laughing out loudly Slick, I told ya mbro. You can never win against the mbankstas.
Just join us in planting beans and building mijengo. I remember circa 2009 I was up 200k usd trading on a swiss account going long on some commodities. I thought I was a genius with maneno minki minki on the trading forums just like you. Then one day the graph when shuuuuuuuuuuu pwappp down to my automatic stop position cleaning out 90 percent of those gains in a day! No market news concerning the commodities at hand, no crises, no nothing! The next day it promptly went straight back up pwaaaaaap to where it had been the previous day!Laughing out loudly That's when I knew those manenos are rigged, mbro. They routinely "flush" out all the positions with automatic stops for the heck of it, and make a killing doing so. Once they ban shorts its curtains mbro. Beans and mijengo are the only recourse kapsa kapsa.
Age and family mellows us all over time
slick
#88 Posted : Wednesday, March 18, 2020 3:17:29 PM
Rank: Member


Joined: 6/1/2017
Posts: 288
amorphous wrote:
Laughing out loudly Slick, I told ya mbro. You can never win against the mbankstas.
Just join us in planting beans and building mijengo. I remember circa 2009 I was up 200k usd trading on a swiss account going long on some commodities. I thought I was a genius with maneno minki minki on the trading forums just like you. Then one day the graph when shuuuuuuuuuuu pwappp down to my automatic stop position cleaning out 90 percent of those gains in a day! No market news concerning the commodities at hand, no crises, no nothing! The next day it promptly went straight back up pwaaaaaap to where it had been the previous day!Laughing out loudly That's when I knew those manenos are rigged, mbro. They routinely "flush" out all the positions with automatic stops for the heck of it, and make a killing doing so. Once they ban shorts its curtains mbro. Beans and mijengo are the only recourse kapsa kapsa.


Haha.You are hilariousLaughing out loudly Laughing out loudly .Yes Wall Street is a rigged game where the professionals keep swindling the naive retail investors and traders.Brokers actually sell order flow data like where retail investors normally put their stops to the Wall Street banks,hedge funds and other money managers so that they can run those stops and clean retail investors out.When a major money manager wants to sell a position,they go on mainstream media channels like CNBC or Bloomberg,tout the stock as a screaming buy and suck in retail investors and when the price appreciates from retail buying they dump the stock onto the retail investors.Sometimes they might buy a small amount of a stock that they want to sell so that retail investors see that the equity is moving up,retail then jump in and the money mangers sell to the retail.They spoof markets with fake orders that they cancel but this spoofed fake trades show up in the order flow that retail investors assume its a genuine order which they jump into and get killed by the professionals.They also tout to their clients to keep buying new stocks to collect commissions on your trades without caring if you will suffer a loss.Its just how it is.When one watches movies like the 'Wolf of Wall Street','The Big Short','Margin Call','Wall Street (1987 film)','Wall Street: Money Never Sleeps' and others then you truly know how sick the Wall Street Game is.Its why 90% of retail traders lose 90% of their money in the first 90 days ie the 90-90-90 rule.

Best way to play this game is to keep your position sizes small so that if the market suddenly turns against you,you dont lose most of your capital,respect your profit target and stop loss,study charts all the time and keep abreast with latest events.You wont become a millionaire overnight but you will make small but sure gains and build your portfolio with time.Problem with most retail is that they enter the market with dreams of instant riches only to end in tears putting like 50% or going all in on one trade then blowing up in days or weeks losing all their capital.
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
slick
#89 Posted : Wednesday, March 18, 2020 8:07:21 PM
Rank: Member


Joined: 6/1/2017
Posts: 288
US STOCK TRADING HALTED FOR 15 MINUTES AFTER MARKET FALLS 7%.FOURTH TIME IN 8 TRADING DAYS

Sad Sad Sad




The Dow Jones Industrial Average wiped out all the gains logged since Donald Trump’s inauguration
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
lochaz-index
#90 Posted : Wednesday, March 18, 2020 8:35:49 PM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
slick wrote:
US STOCK TRADING HALTED FOR 15 MINUTES AFTER MARKET FALLS 7%.FOURTH TIME IN 8 TRADING DAYS

Sad Sad Sad




The Dow Jones Industrial Average wiped out all the gains logged since Donald Trump’s inauguration

At this rate those circuit breakers will malfunction! Truly historic times.
The main purpose of the stock market is to make fools of as many people as possible.
wukan
#91 Posted : Wednesday, March 18, 2020 8:51:00 PM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,569
Oil prices is the bloodbath. Below 20 coming up. S&P broke through some technical so more selling on the way.
slick
#92 Posted : Wednesday, March 18, 2020 9:09:53 PM
Rank: Member


Joined: 6/1/2017
Posts: 288
wukan wrote:
Oil prices is the bloodbath. Below 20 coming up. S&P broke through some technical so more selling on the way.


Yeah.S&P 500 has hit its December 24th 2018 low at about 2350 when during that time it hit a bear market until Fed changed course by stating they would stop raising rates and in 2019 they cut rates and launched repo and not QE liquidity operations.

Now that that 2350 has been breached (and Dow below 20,000 psychological level)the algos and market participants will panic out of stocks.
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
lochaz-index
#93 Posted : Wednesday, March 18, 2020 9:22:30 PM
Rank: Veteran


Joined: 9/18/2014
Posts: 1,127
wukan wrote:
Oil prices is the bloodbath. Below 20 coming up. S&P broke through some technical so more selling on the way.

WTI losses outpacing Brent nearly twice as fast. US energy sector index crashed below GFC lows! Lots of pain for shale producers.
The main purpose of the stock market is to make fools of as many people as possible.
slick
#94 Posted : Wednesday, March 18, 2020 10:01:07 PM
Rank: Member


Joined: 6/1/2017
Posts: 288
lochaz-index wrote:
wukan wrote:
Oil prices is the bloodbath. Below 20 coming up. S&P broke through some technical so more selling on the way.

WTI losses outpacing Brent nearly twice as fast. US energy sector index crashed below GFC lows! Lots of pain for shale producers.


Putin's revenge.In the late 1980s the Regan Administration colluded with Saudi Arabia to tank oil prices from 30 USD to 10 USD to bankrupt the USSR into collapse.
Then in 2014,the US colluded with Saudi Arabia to push oil prices lower to punish Russia for annexing Crimea and with sanctions Russia went into recession.Now Putin unleashing his payback.Moscow has largely USD dedollarized,has very little external debt thus Putin has decided to play the oil card to force prices and inflict pain on the overleveraged debt ridden US shale oil industry and general US economy into recession.Geo-politics game per excellence.
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
rwitre
#95 Posted : Wednesday, March 18, 2020 10:30:15 PM
Rank: Member


Joined: 3/8/2018
Posts: 507
Location: Nairobi
Get into real estate if you're okay with losing liquidity
Snap up some gold if the logistics don't tire you
Buy bitcoin if you can stomach the volatility

Hard assets where 1 unit today will be the same valuable 1 unit at the end of the year regardless of which policy is implemented by the government, how much money is printed, or what kind of inflation hits.
slick
#96 Posted : Thursday, March 19, 2020 8:23:14 AM
Rank: Member


Joined: 6/1/2017
Posts: 288
rwitre wrote:
Get into real estate if you're okay with losing liquidity--I would wait abit.In my opinion Kenyan real-estate is a bit overpriced (of course not to insane levels like the real estate bubble of Australia,Canada,HongKong,Singapore and even US).I would wait until the current global deflationary crisis fully plays out then scoop real estate at cheaper prices
Snap up some gold if the logistics don't tire you-Sure,gold and especially silver are grossly undervalued and margin calls in the Comex futures markets have further decimated them but the physical market has decoupled from the Comex paper markets and trading at much higher prices.In the inevitable massive inflationary crisis that central banks are creating with record level money printing,physical gold and silver are a superb asset class to hold.Silver massively outperforms gold percentagewise in such scenarios
Buy bitcoin if you can stomach the volatility-Good speculative asset

Hard assets where 1 unit today will be the same valuable 1 unit at the end of the year regardless of which policy is implemented by the government, how much money is printed, or what kind of inflation hits.

Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
FUNKY
#97 Posted : Thursday, March 19, 2020 8:34:25 AM
Rank: Veteran


Joined: 4/30/2010
Posts: 1,635
slick
#98 Posted : Thursday, March 19, 2020 8:50:17 AM
Rank: Member


Joined: 6/1/2017
Posts: 288
FED NOW BAILING OUT DISTRESSED MONEY MARKET FUNDS,BUYS CORPORATE,MUNICIPAL BONDS PLUS STOCKS

Everyday a new scheme by the Fed to pump up failing markets.

On late Wednesday evening,the Fed has setup Money Market Mutual Liquidity Fund which will provide loans to financial institutions to buy assets from prime money market funds.Concern had risen in recent days about the prime funds, which purchase non-Treasury debt, such as corporate debt, commercial paper and government agency debt. They had seen outflows as large corporate and institutional depositors sought to raise cash amid the financial turmoil.This in turn put pressure on corporate funding markets, as prime money market funds withdrew and now the Fed is to backstop this market.



Fed now buying stocks and corporate bonds apart from the usual treasuries and mortgage backed securities.

As indicated in the Fed's website,Federal Reserve Board announces establishment of a Primary Dealer Credit Facility (PDCF).In this facility,credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities.

As I had always suspected Fed would inevitably scoop up corporate bonds and stocks and add them to its ridiculously bloated balance sheet.



Overnight repos now hit 1 trillion a day



The New York Federal Reserve said it will make up to $1 trillion a day available for loans in the repo market for the remainder of this week.

The Fed said it will offer up to $500 billion in overnight repo loans each morning and an additional $500 billion in overnight repo loans each afternoon.

Lets not forget there are still 500 billion term repos being injected and 700 billion of QE.

With all this stocks still closed lower with S&P down 5.18%.This index breached the 2350 December 24th 2018 lows and Plunge Protection Team steeped up to buy the market in the last 20 minutes of trading to ensure it doesnt close below this level.Dow closes below 20,000 practically wiping out all gains made since Trump took office.

Futures again down today with Dow futures down -666 as I write this.

WOOOOOI!!Sad Sad Laughing out loudly Laughing out loudly
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
slick
#99 Posted : Thursday, March 19, 2020 8:55:11 AM
Rank: Member


Joined: 6/1/2017
Posts: 288
slick wrote:
FED NOW BAILING OUT DISTRESSED MONEY MARKET FUNDS,BUYS CORPORATE,MUNICIPAL BONDS PLUS STOCKS

Everyday a new scheme by the Fed to pump up failing markets.

On late Wednesday evening,the Fed has setup Money Market Mutual Liquidity Fund which will provide loans to financial institutions to buy assets from prime money market funds.Concern had risen in recent days about the prime funds, which purchase non-Treasury debt, such as corporate debt, commercial paper and government agency debt. They had seen outflows as large corporate and institutional depositors sought to raise cash amid the financial turmoil.This in turn put pressure on corporate funding markets, as prime money market funds withdrew and now the Fed is to backstop this market.



Fed now buying stocks and corporate bonds apart from the usual treasuries and mortgage backed securities.

As indicated in the Fed's website,Federal Reserve Board announces establishment of a Primary Dealer Credit Facility (PDCF).In this facility,credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities.

As I had always suspected Fed would inevitably scoop up corporate bonds and stocks and add them to its ridiculously bloated balance sheet.



Overnight repos now hit 1 trillion a day



The New York Federal Reserve said it will make up to $1 trillion a day available for loans in the repo market for the remainder of this week.

The Fed said it will offer up to $500 billion in overnight repo loans each morning and an additional $500 billion in overnight repo loans each afternoon.

Lets not forget there are still 500 billion term repos being injected and 700 billion of QE.

With all this stocks still closed lower with S&P down 5.18%.This index breached the 2350 December 24th 2018 lows and Plunge Protection Team steeped up to buy the market in the last 20 minutes of trading to ensure it doesnt close below this level.Dow closes below 20,000 practically wiping out all gains made since Trump took office.

Futures again down today with Dow futures down -666 as I write this.

The irony is that with all the trillions being printed daily by the Fed to pump up markets,the USD is surging with the Dollar Index surpassing the 100 mark and valued at 101.73 as I write this.Wow its good to be the reserve currency.Print all the money you want and your currency still increases in value in psychological terms but how long can that last??

WOOOOOI!!Sad Sad Laughing out loudly Laughing out loudly

Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
slick
#100 Posted : Thursday, March 19, 2020 11:43:48 AM
Rank: Member


Joined: 6/1/2017
Posts: 288
EUROPEAN CENTRAL BANK (ECB) LAUNCHES A NEW STIMULUS 750 BILLION EURO BOND BUYING PROGRAM

The Eurozone that suffers from a minus 0.5 !!ECB deposit rate Laughing out loudly Laughing out loudly ,negative yielding government bonds and negative yielding corporate bonds has now committed to a further 750 billion Euros to buy both government and corporate bonds.



To state that negative yielding sovereign and corporate bonds are a disaster is to understate the obvious.An investor would be insane to hold these bonds to maturity as you are guaranteed to lose money yet Japan and Eurozone are flooded with these type of bonds.At some point 1/3 of global sovereign debt (17 trillion)and 1 trillion of corporate debt was negative yielding.Investment firms are forced by law to buy these bonds for capital appreciation when they buy/sell them in the secondary market but when they near maturity they dump them to the ECB to eat the losses at maturity.

ECB holds upto 1/3 of the entire government bond market of the Eurozone countries.The ECB balance sheet is just over 4.7 trillion Euros.They also scoop up corporate bonds from firms like LVMH, Kering, Unilever, Nestle, Repsol,Siemens and Shell some of which are negative yielding corporate bonds with zero coupon meaning investors are effectively paying to lend the company money if they hold the debt to maturity and the issuing firm does not pay a single penny in interest.Greek,Italian and Spanish bonds are always in distress and the ECB just buys them up to feed their large deficit social welfare spending otherwise their bond markets would collapse.

Thanks to negative interest rates,European banks are zombie banks with hardly any profitability,share prices collapsed upto 90% for some of them.Italian banks were already choking under 20% rate of Non Performing Loans and Covid-19 just makes the situation worse as now Italian government has implemented moratorium on loan repayments for duration of the outbreak meaning these banks are in even more dire straits needing ECB bailout.Germany's largest bank ie Deutsche Bank is a notorious loss making bank with share price having collapsed from 148 in 2007 pre GFC to trade as low as 4.99 this week.This bank has engaged in all manner of fraud schemes like money laundering,rigging interest rates like LIBOR,rigging gold/silver markets and fined numerous times for this.It posted a loss of 5.3 billion Euros in 2019 and had a 47 trillion derivatives exposure (over 12 times German GDP).It was regarded by IMF as the most systemically riskiest bank by the IMF and most expect it to the first Lehman type failure in the global downturn but this failure would be at least 5 times larger than the Lehman bankruptcy.



Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money
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