As the markets continue to trade risk premium derivatives,
here is Gary Shilling giving you and edge with his four part series on
Bloomberg.com
One can agree or disagree with Gary’s age and interested
view of what envelops him, one thing is laudable, he is sharing a point of view
that directs you to search for facts and establishes the risks that people are confronting
today, nothing less than a big thank you and a candle in the altar for Mr.
Schilling for caring to warm all of what he thinks is coming, again, you might
agree or disagree but the risk premium is there priced in the markets.
As of 4/19/2012 the risk premium of countries stood at the
following prices.
Country
s
|
Price
|
Variation
|
%
|
Spain
|
423,23
|
+13,02
|
+3,17%
|
142,00
|
+9,88
|
+10,17%
|
|
392,00
|
+4,13
|
+4,15%
|
|
1.937,00
|
-71,00
|
-1,18%
|
|
1.068,00
|
+0,00
|
+0,03%
|
|
641,00
|
+-10,00
|
+0,43%
|
|
Risk
premium
|
|||
What does it means?
Everything needs a little context, France risk premium in a
week went up 40%; Greece is trading at default rates, after all those bail-outs
and piles of cow manure printed about Greece, the Greeks are suffering at
levels never seen before, even more than when the fascist ruled the country, I am
sure Greeks are getting a new meaning to Democracy after creating it; Portugal
is getting a shocking awakening about what capitalism means, Portuguese people are getting where no one
wants to be, a population losing its patience; Ireland, can’t do much after it guaranteed all
bank debts with taxpayers money, people in Ireland now
have to live with a debt rope on their neck rope at risk rates that no country is capable of surviving; Italy is having its “Coming
to Jesus” moment with rates that might prove unsustainable if they continue to
increase, the 450 level risk rate might
put Italy a full risk; and last but not least Spain.
Well, well, Spain is different, still has its sun and gorgeous Swedish, Norwegians and other northern Europeans are buying real estate in the country like never before (no kidding), the sun still shines in Spain even if the banks go bust. Did I say bust and Spain in the same line? Yes, Spain is getting to the finish line of the nation busted contest.
Well, well, Spain is different, still has its sun and gorgeous Swedish, Norwegians and other northern Europeans are buying real estate in the country like never before (no kidding), the sun still shines in Spain even if the banks go bust. Did I say bust and Spain in the same line? Yes, Spain is getting to the finish line of the nation busted contest.
Europe has a tool they do not want to use for fear of the US, it is its single currency.
What Europe does not have is a single economic policy.
The Europeans step number one for its solution is to trash (devaluation is a solution to dissolution) their cherished Euro, if they can bring the price down around 30% to 50% int eh next 12 months, their internal growth will accelerate around 7% to 9 % annually in the first two years and have a chance to fix their underlining deficits, if they keep the Euro trading at a 40% premium, they are kidding themselves and they will bring 500 million people to the streets.
Read Schilling piece, and where it lies the real risks.
What Europe does not have is a single economic policy.
The Europeans step number one for its solution is to trash (devaluation is a solution to dissolution) their cherished Euro, if they can bring the price down around 30% to 50% int eh next 12 months, their internal growth will accelerate around 7% to 9 % annually in the first two years and have a chance to fix their underlining deficits, if they keep the Euro trading at a 40% premium, they are kidding themselves and they will bring 500 million people to the streets.
Read Schilling piece, and where it lies the real risks.
If you thought throwing out of power Saddam, Qaddafi and others in the Middle East was an act of liberation, for many in Europe their leaders are starting to
look like those tyrants.
Never underestimate the power of the yayoflautas.
(a new word I learnt in the Spanish the social lexicom)
(a new word I learnt in the Spanish the social lexicom)
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