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by Ashraf Laidi
Posted: Feb 20, 2010 5:00
Comments: 30765
Posted: Feb 20, 2010 5:00
Comments: 30765
Forum Topic:
EUR
Discuss EUR in this thread
adding to usd/chf short 8888
http://www.johnmauldin.com/frontlinethoughts/european-summit-a-plan-with-no-details
SIPV ( special investment purpose verhicles - to avoid "Eurobonds") . What does it mean?
I think it means EFSF is still 1.3 trn but without leverage . 100% margin , that is. Or is it a margin call?
Take this Thursday big summit announcement friday Italy bond auction at 6.06%...hum.
It is not even a done deal that the haircut is accepted. Today genius of finance Schauble warned in an interview with Der Spiegel banks must accept haircut on voluntary basis otherwise... what otherwise? Otherwise CDS are triggered. However not only banks are bondholders , also insurance ( life) and pension funds. he didn't even ask these Greece bond holders. Neither central banks. Not Saudi Arabia.
That idea was silly not thoroughly thought.
50 bsp cut, nothing less.
It is not a done deal ECB cuts the funds rate. A 25bps cut would lead to speculations of the begin of a series of cuts. Certainly gold positive and not good for EUR. In contrast to Ashraf I think a hard 50 bp cut would be regarded as a one time action and positive for EUR.