And three! After Peter Orszag and Christina Romer, now Larry Summers, chief economic advisor to Barack Obama, thanks and salutes: a return in November to teach at Harvard. Hard to blame them: on the one hand, the situation looks less and less manageable, the other the choice of the Fed create a new wave of stimulus is likely to create the conditions for "perfect bubble" of public debt.
Also because of Washington's policy in the rooms begin to circulate rumors of concern, obviously filtered from New York, the Chinese yuan, in fact, could depreciate further appreciate that more because of the real estate bubble of the Chinese would explode. Thinks so, at least, Jim Chanos, founder of hedge fund Kynikos Associates, known protagonist of policy "to bear" to China.
A good bet, given that for nine days in this part of the yuan is appreciating against the dollar after the joint shoot Barack Obama and Tim Geithner against non-compliance monetary agreements by Beijing. "We think - said to ilsussidiario.net Chanos - that there is a huge bubble in China and this could have a shock effect against certain commodities and materials. I make no secret of the fact that we are short on how to fund construction, real estate companies and also companies that deal with basic materials for construction. "
The problem today is that net exports does not contribute as it was before the country's economic growth and the Chinese authorities are seriously considering a new policy of strict respect for the real estate market. In this context, therefore, the risk is a depreciation of the yuan, a situation that would call the turbo to exports, but that would create intolerable problems for the United States.
"We need to get good lenses when you look at the macro data offered by the Chinese authorities, because what we see is almost always what they want us to see. Their only concern now is to run more and more to keep those numbers tied to the GDP, that is the problem. In China, everything is tied to numbers, the politics of saving face than in the West and especially since there is no free market in China, most economic activities are done through state controlled enterprises and state banks or semi-state " , says Chanos.
Through the temptation of a policy of strict, China would then prepare the ground for a soft landing by the explosion of the bubble, "the problem is that history teaches us that normally the events are revealed in a more uncontrollable when you go down, rather than when it grows" concludes Chanos. If we combine this with the fact that demand for new mortgages fell for the fourth week in a row in the U.S., -0.03 to 4.44% share, despite the fixed exchange rates to levels not seen so low, then you understand that is the macro to send signals daunting situation: still a 0.1% decline is to reach the record low of 1990.
Moreover, the problem is represented by the fact that in view of the new policy stimulus of the Fed, the gold is pointing directly toward the $ 1,300 an ounce: Yesterday morning the stock was 1293.5, +1.51% in one day. But there is no appetite in the markets just for the safe haven par excellence, even the bond of the peripheral countries of Europe are selling (the rods of recent days confirm this) but the returns that countries are forced to pay for funding are unsustainably high and then we will see the countries that emit forced to restructure their debt. In short, there is growing fear about the ability of Greece, Ireland, Portugal and Spain to repay their debt, "When you pay nearly four points more than the bund, both you and I might borrow the money", Case Irwin Stelzer, director of the Hudson Institute and eminence grise in the U.S. by Rupert Murdoch.
"The problem is that market investors are becoming increasingly nervous about the ability of these countries to cope with their debt, I do not see the opportunity to continue on this path, with these interest rates, without some sort of restructuring. The math, however, is very simple: you can not go on like this, "continues Stelzer.
very concerned about this also Par Magnusson, chief analyst for the Nordic market to RBS, that 'of course is quite easy to sell bonds with returns like that, the problem is that sooner or then you have to repay that money. For example, how the hell can Greece repay an interest rate of 11% with the debt ratio to 100%? We share only 12.5% \u200b\u200bof GDP in interest payments. "
How, then, as for example Greece has already benefited and are benefiting from the assistance of the European Financial Stability Facility (EFSF), a fund recently rated AAA by major rating agencies? For Stelzer, however, "the EFSF not as great as was thought at the beginning and then it would not be able to help nations in crisis for a long period of time. Also, anyone who still look to credit rating agencies as a guide or assessors tools and means, you do not read the newspapers over the past ten years. "
The trouble, from a certain point of view, is that the issue of debt restructuring by some countries has been put into oblivion the moment in which the ECB has decided to enter the market to buy bonds and sovereign bonds, politics sufficient to calm the markets and not artificially put under scrutiny the issue of restructuring. Magnusson does not think so, that 'the ECB does what it can. The problem is the governments of those countries that are just by rolling forward the snowball, the problem is that doing so sooner or later there will be an avalanche. "
Yeah, sooner or later will the avalanche. Or the supreme revenge against excessive speculation crafted by rating agencies and investment banks: a haircut dry yields of 30-40% in accordance with the emergency or the coating on them or even longer time spans punitive laws at the level of taxation obligations. Of course the ECB will not be happy, since it is mainly the banks - German head - to stock up on sovereign bonds in search of yields that are enticed but there you: if there is to choose between a default and the chain of scornatura some institutional speculator, I think is biased to the latter. Because if it falls to the sand castle, stifle all: who first Who then.
Also because of Washington's policy in the rooms begin to circulate rumors of concern, obviously filtered from New York, the Chinese yuan, in fact, could depreciate further appreciate that more because of the real estate bubble of the Chinese would explode. Thinks so, at least, Jim Chanos, founder of hedge fund Kynikos Associates, known protagonist of policy "to bear" to China.
A good bet, given that for nine days in this part of the yuan is appreciating against the dollar after the joint shoot Barack Obama and Tim Geithner against non-compliance monetary agreements by Beijing. "We think - said to ilsussidiario.net Chanos - that there is a huge bubble in China and this could have a shock effect against certain commodities and materials. I make no secret of the fact that we are short on how to fund construction, real estate companies and also companies that deal with basic materials for construction. "
The problem today is that net exports does not contribute as it was before the country's economic growth and the Chinese authorities are seriously considering a new policy of strict respect for the real estate market. In this context, therefore, the risk is a depreciation of the yuan, a situation that would call the turbo to exports, but that would create intolerable problems for the United States.
"We need to get good lenses when you look at the macro data offered by the Chinese authorities, because what we see is almost always what they want us to see. Their only concern now is to run more and more to keep those numbers tied to the GDP, that is the problem. In China, everything is tied to numbers, the politics of saving face than in the West and especially since there is no free market in China, most economic activities are done through state controlled enterprises and state banks or semi-state " , says Chanos.
Through the temptation of a policy of strict, China would then prepare the ground for a soft landing by the explosion of the bubble, "the problem is that history teaches us that normally the events are revealed in a more uncontrollable when you go down, rather than when it grows" concludes Chanos. If we combine this with the fact that demand for new mortgages fell for the fourth week in a row in the U.S., -0.03 to 4.44% share, despite the fixed exchange rates to levels not seen so low, then you understand that is the macro to send signals daunting situation: still a 0.1% decline is to reach the record low of 1990.
Moreover, the problem is represented by the fact that in view of the new policy stimulus of the Fed, the gold is pointing directly toward the $ 1,300 an ounce: Yesterday morning the stock was 1293.5, +1.51% in one day. But there is no appetite in the markets just for the safe haven par excellence, even the bond of the peripheral countries of Europe are selling (the rods of recent days confirm this) but the returns that countries are forced to pay for funding are unsustainably high and then we will see the countries that emit forced to restructure their debt. In short, there is growing fear about the ability of Greece, Ireland, Portugal and Spain to repay their debt, "When you pay nearly four points more than the bund, both you and I might borrow the money", Case Irwin Stelzer, director of the Hudson Institute and eminence grise in the U.S. by Rupert Murdoch.
"The problem is that market investors are becoming increasingly nervous about the ability of these countries to cope with their debt, I do not see the opportunity to continue on this path, with these interest rates, without some sort of restructuring. The math, however, is very simple: you can not go on like this, "continues Stelzer.
very concerned about this also Par Magnusson, chief analyst for the Nordic market to RBS, that 'of course is quite easy to sell bonds with returns like that, the problem is that sooner or then you have to repay that money. For example, how the hell can Greece repay an interest rate of 11% with the debt ratio to 100%? We share only 12.5% \u200b\u200bof GDP in interest payments. "
How, then, as for example Greece has already benefited and are benefiting from the assistance of the European Financial Stability Facility (EFSF), a fund recently rated AAA by major rating agencies? For Stelzer, however, "the EFSF not as great as was thought at the beginning and then it would not be able to help nations in crisis for a long period of time. Also, anyone who still look to credit rating agencies as a guide or assessors tools and means, you do not read the newspapers over the past ten years. "
The trouble, from a certain point of view, is that the issue of debt restructuring by some countries has been put into oblivion the moment in which the ECB has decided to enter the market to buy bonds and sovereign bonds, politics sufficient to calm the markets and not artificially put under scrutiny the issue of restructuring. Magnusson does not think so, that 'the ECB does what it can. The problem is the governments of those countries that are just by rolling forward the snowball, the problem is that doing so sooner or later there will be an avalanche. "
Yeah, sooner or later will the avalanche. Or the supreme revenge against excessive speculation crafted by rating agencies and investment banks: a haircut dry yields of 30-40% in accordance with the emergency or the coating on them or even longer time spans punitive laws at the level of taxation obligations. Of course the ECB will not be happy, since it is mainly the banks - German head - to stock up on sovereign bonds in search of yields that are enticed but there you: if there is to choose between a default and the chain of scornatura some institutional speculator, I think is biased to the latter. Because if it falls to the sand castle, stifle all: who first Who then.
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