Reuters reports that Ireland’s parliament has approved the 85 billion euro bailout, by a vote of 81 to 75. In related news, one Canadian posing as a Irish citizen recently offered his two cents on the situation, noting that there are four causes of Ireland’s current predicament. They are: 1) ‘greed, greed and more greed’ 2) ‘the stupid fucking government’ 3) ‘very deceitful and conniving developers’ 4) ‘wanking fucking bankers…assholes.’ Continue reading »
IMF
The IMF recently released a worrisome report about Japan’s growing fiscal deficits. The nation’s second-biggest economy has injected several hundred billion dollars in stimulus money into its economy in the hope of avoiding recession.
That seems to be working as Japan’s recovery is gaining strength. The IMF believes GDP will grow by about 2 percent in 2010 and 2011. But, the risk is that tax revenues are dropping and the government is racking up huge deficits. That could be a big problem down the road. Continue reading »
The following post is by our anonymous hedge fund manager friend, who shall remain nameless. He runs the Emerging Markets desk at his firm.
Greece CDS has traded wider this morning on comments from the Prime Minister that his government might seek aid from the IMF. This has been taken to suggest that the rest of the EU has still not yet come to internal agreement about how to handle Greece’s debt woes. That several EU countries view an IMF-led package for an EMU member as, if not a mortal embarrassment, then at least something resolutely not to be wished has raised fears that these countries, via their influence at the IMF board level, might close off even this avenue of assistance to the Greeks. Iceland might be able to tell Greece a thing or two about trying to keep an IMF program on track while suffering the wrath of several EU members. Continue reading »
An “irate taxpayer and emerging markets hedge fund manager” points out that, as currently proposed, the Special Drawing Rights option to the U.S. Dollar as a reserve currency has all the texture and stickiness of a redistribution scam. He points out:
Basically, it is money-printing on a global scale, with the fruits being shared among all members of the IMF, including some of the world’s most noxious regimes. Of course, the SDR consists only of USD, GBP, EUR, and JPY, so you can see whose citizens bear the cost and their currencies get diluted as the crap countries cash in their shiny, new SDRs. For example, international financial scofflaw Argentina gets over $2 billion worth of SDRs. The Nigerians, whose email scammers will surely now start dangling SDR-related propositions to already-fleeced Americans, will get a similar amount. Syria gets $350 million, perhaps some of that will go to protect Hezbollah from a painful devaluation that would push up the local currency price of Cemtex.
We aren’t quite this caustic in our assessment of the SDR scheme (we mean this in the British sense of the word) but the points are not lost on us. Certainly, now that the United States is somewhat dazed by the present crisis, economic heel-nipping is easy. Let’s just hope that some misplaced “capitalist guilt” doesn’t cause this Administration, or the next, to buy into what amounts to a redistribution scheme.
Iceland’s central bank Tuesday pushed its key interest rate up to a record high of 18% from 12%, reversing a hefty rate cut earlier in the month.
[...]
Trade in the Icelandic krona is at a virtual standstill and is fixed by the central bank in a daily foreign currency auction. Monday, the rate was fixed at 152 kronur to the euro and 120.69 kronur to the dollar.
It is as if the unwinding of the carry trade that blew them up in the first place was the thin shadow of a distant memory. Apparently, the massive hike is the IMF’s bright idea.
Oh, what I wouldn’t give for a foreign exchange account, access to the kronur and a big hunk of liquidity right now.
Iceland Raises Key Rate Six Points [The Wall Street Journal]
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
