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| Didn't I tell you to buy CHF after intervention rally? |
Summary: Both SNB (directly) and BoJ (by threatening) have scared the markets, but with little signs of stopping investor’s appetite for their national currencies. Otherwise, everything again worse.
View: CHF is really, really hurting CEE countries. Their banks and households made the classical mistake of taking mortgages and car loans in foreign currency in order to avoid the high domestic interest rates. Otherwise my views are unchanged: read the views on previous posts.
Joke of the Day: “"Developments in the sovereign bond markets of Italy and Spain are a cause of deep concern. These developments are clearly unwarranted on the basis of economic and budgetary fundamentals..” – President Barroso
EURO CRISIS
Good AND long article on Spain’s economic situation
Spain’s High Risk Election Process – EconoMonitor
DB’s comment on Swiss National Bank’s actions today
Le plan, negatifs taux d’intérêt – redux – alphaville FT
Interesting speculation that the recent actions and talks from central banks might be a precursor to something big and coordinated – because everyone knows that’s what it takes
Are they Alone? – Macro Man
Fresh analysis of what the strengthening of CHF is doing to CEE countries with tons of debt nominated in cuckoo currency. Croatia & Hungary, heads up.
Oh Schweizer! – alphaville FT
Swiss National Bank Intervention Epic Fail #2 – Zero Hedge
FINANCIAL CRISIS
LIBOR-rates moving up – interbank money is now as tight as it has ever been since the “end” of the financial crisis.
The unintended tightening – alphaville FT
A real professor of economics with the help of four charts explains that everything is ok. Two questions: how much would you pay him to teach you economics and how useful are Fed’s financial stress indices?
4 Fin. Stress Indexes Stable - No Cause for Concern – Carpe Diem
Discusses an interesting paper questioning the usefulness of debt/GDP ratio, as the demographics are a better indicator of sovereign solidness. A country with low debt but rapidly aging population will fail just as spectacularly.
Debt ratings, by demographics – alphaville FT
and bar charts comparing the figures