€uro vs. Doller "The world is not enough!!"

Nach der Finanzkrise tobt der Währungskrieg, wer hat die Leitwährung der Zukunft, wer kann seine Währung so weit drücken das die Exporte die Konjunktur antreiben. Eins der profitabelsten "Schlachtfelder" ist die €uro/Doller Paarung, hier treffen sich die Day Trader um alles zu wagen, ihren finanziellen Intellekt, ihr CT analytisches Können und ihr fundamentales Wissen gegen den Währungsmarkt zu testen. Viele werden fallen, wenige werden alles erreichen, den der Markt hat immer recht. ForEx die Königsklasse der Trader.

€€€€€€€€"The winner takes it all, the losers standing small!!!"$$$$$$$$  

EU JUNCKER: Highly indebted Greece needs a "soft, voluntary restructuring" of its debt.

EU JUNCKER (con't): "... explain well why the euro zone is in the epicenter of a global financial challenge at a moment, at which..."

More quotes from EU's Juncker from over the weekend: "The debt level of the USA is disastrous...[t]he real problem is that no one can..."

EU JUNCKER (con't): "...the fundamental indicators of the euro zone are substantially better than those of the U.S. or Japanese economy."
12 Jun 17:06:27  

http://de.reuters.com/article/topNews/idDEBEE75B00F20110612

Weidmann skeptisch zu Banken-Beteiligung an Hellas-Hilfe
Sonntag, 12. Juni 2011, 13:29 Uhr

Berlin (Reuters) - Bundesbankpräsident Jens Weidmann hat Zweifel an der Umsetzbarkeit und Wirkung einer Beteiligung privater Gläubiger an den Kosten der Griechenlandkrise geäußert.

An dem Grundgedanken sei nichts falsch, sagte Weidmann der Zeitung "Welt am Sonntag". "Im Gegenteil, es wäre sinnvoll, weil so die Gläubiger mit in die Verantwortung für ihre Anlageentscheidungen genommen werden, und es entlastet die Steuerzahler." Es gehe aber um die Umsetzung. "Eine erzwungene Laufzeitverlängerung birgt in der konkreten Situation mehr Risiken als Chancen." Vor allem störten die Folgen für die Notenbanken. "Ein vermutlich vergleichsweise kleiner Beitrag der Privaten würde mit Ansteckungsgefahren und einer höheren Risikoübernahme der Notenbanken erkauft. Dagegen wehren wir uns", sagte Weidmann.

Wie Finanzminister Wolfgang Schäuble plädierte am Wochenende auch Eurogruppen-Chef Jean-Claude Juncker erneut für eine Beteiligung privater Gläubiger. Im Gespräch ist, dass die Banken freiwillig einer Verlängerung der Laufzeit griechischer Anleihen zustimmen. Das Euro-Land bekäme so einen Zahlungsaufschub und wäre nicht gezwungen, sich an den Finanzmärkten um Geld zu bemühen.

MERKEL: KEINEN UNKONTROLLIERTEN BANKROTT ZULASSEN

Eine rein freiwillige Lösung würde er begrüßen, sagte Weidmann. Die Gläubiger sollten ein Interesse an einer Stabilisierung haben und bereit sein, einen eigenen Beitrag zu leisten. "Allerdings sollten wir die Erwartungen auch deshalb nicht zu hoch setzen, da schon jetzt nicht mehr so viele Papiere von privaten Gläubigern außerhalb Griechenlands gehalten werden." Alles andere als eine rein freiwillige Lösung würde wohl als Kreditereignis gewertet. Dann würden die Anleihen durch die Rating-Agenturen als Ausfall bewertet. Damit könnten aber die Investoren das Vertrauen auch in andere angeschlagene Euro-Länder verlieren, und die Krise würde sich weiter ausbreiten, warnte der frühere Wirtschaftsberater von Bundskanzlerin Angela Merkel.

Bei einem Kreditereignis handelt es sich um eine völlige oder teilweise Zahlungsunfähigkeit des Schuldners, bei der Kreditversicherungen (CDS) fällig werden. Viele Experten befürchten, dass dies eine Finanzkrise wie nach der Pleite der der US-Bank Lehman Brothers auslösen könnte.

Davor warnte auch die Kanzlerin. Weder dürfe Deutschland "einen unkontrollierten Bankrott eines Landes zulassen", noch etwas tun, was den Aufschwung weltweit insgesamt in Gefahr bringe, sagte Merkel in ihrer wöchentlichen Video-Botschaft. Der Bankrott von Lehman habe in Deutschland 2009 zu einem Wirtschaftseinbruch von fast fünf Prozent geführt. "So etwas muss unbedingt verhindert werden."

Bis 2014 muss Griechenland Staatsanleihen im Wert von 80 bis 90 Milliarden Euro an seine Geldgeber zurückzahlen. Rund ein Drittel stehen Banken, Fonds, Versicherungen und anderen privaten Geldgebern zu, der Rest öffentlichen Gläubigern wie der Europäischen Zentralbank (EZB).

WEIDMANN: GRIECHENLAND MUSS LIEFERN

Weidmann sagte, die Zahlungsfähigkeit Griechenlands hänge vor allem von der Haltung der Regierung und der Bevölkerung ab, die immer mehr gegen den verordneten Sparkurs rebelliert. Wenn das Euro-Land die strikte Auflagen, zu denen auch umfangreiche und rasche Privatisierungen gehören, nicht erfülle, entfalle die Basis für weitere Mittel aus dem Hilfsprogramm. "Griechenland hätte dann diese Entscheidung getroffen und müsste die sicherlich dramatischen wirtschaftlichen Konsequenzen eines Zahlungsausfalls tragen." Das sei zwar nicht sinnvoll und würde die Partnerländer in eine schwierige Situation bringen. "Der Euro wird aber auch in diesem Fall stabil bleiben."  

Trichet’s ‘Cold War’ With Germany Risks Damage That May Force Compromise

ECB and Germany May Be Forced to Compromise

By James Hertling and Jonathan Stearns - Jun 13, 2011 1:00 AM GMT+0200

The confrontation between the European Central Bank and Germany over bailing out Greece risks causing so much damage that officials may be forced to compromise.

“The balance of forces in the euro zone is a little like it was in the Cold War: both sides are brandishing deterrents that would be too horrendous to use,” said Philip Whyte, a senior research fellow at the Centre for European Reform in London. “It’s all going to turn on whether you can fiddle with debt maturities without calling it a credit event.”

ECB President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble are at odds over investors’ role in the second Greek rescue in 14 months. The dispute turns on how politicians make good on a promise to push creditors to pay some of the cost, a step that Trichet said on June 9 could be an “enormous mistake.”

Unless a deal can be struck to guarantee Greece’s financing needs for the next 12 months, the International Monetary Fund has threatened to withhold its share of what remains of Greece’s original 110 billion-euro ($159 billion) bailout. Euro-area finance ministers have called a special meeting tomorrow as they try to avoid what European Economic and Monetary Affairs Commissioner Olli Rehn called a “Lehman Brothers catastrophe on European soil.”

“Europe’s policy makers are playing a high stakes game of poker and Trichet is just not willing to blink yet,” said Julian Callow, chief European economist at Barclays Capital in London. “But history has shown us that he will be pragmatic if it is a question of saving the euro. The ECB will step in if there is a vacuum.”
Trichet’s Compromises

The debt crisis has already forced Trichet to tear up the rule book. The ECB is lending unlimited amounts of cash to support banking systems and has relaxed collateral requirements. In May last year, it took the unprecedented decision to start buying the bonds of distressed nations in an effort to calm markets as Greece’s fiscal woes began to infect other euro-area members.

The Frankfurt-based central bank has since bought about 75 billion euros of bonds. Of that, 40 billion euros is Greek debt, according to a Barclays Capital estimate. The ECB stopped buying bonds 10 weeks ago.

While the ECB has said it could accept a plan in which creditors voluntarily agree to buy Greek bonds to replace maturing debt, Trichet said last week the ECB has no intention of rolling over its own Greek holdings.
Chain Reaction

He also warned against Schaeuble’s proposal that maturities on Greek debt be extended for seven years, an outcome that credit-rating companies said would be considered a default. That in turn could cut off ECB lending to Greek banks, setting off a chain reaction.

Politicians are trying to reach agreement on a new aid package by a European Union summit on June 23-24.

European governments and the IMF would lend as much as an extra 45 billion euros to Greece under a new bailout plan that also includes roughly 30 billion euros in asset-sale proceeds and about 30 billion euros in rollovers by creditors, two people with direct knowledge of the talks said last week.

“Participation of private creditors in cases of insolvency is indispensable,” Schaeuble told lawmakers in Berlin June 10. A working group set up last week is charged with indentifying “a good solution for the involvement of the private sector that can and has to be supported by the European Central Bank,” he said.
ECB Encouragement

While the ECB is prohibited by its founding treaty from buying bonds on the primary market, Deutsche Bank economist Gilles Moec said it could encourage debt rollovers by restarting its secondary-market purchases. Some strategists say the ECB doesn’t have much debt to roll over out of Greece’s total of about 330 billion euros.

“My understanding is the ECB hasn’t bought a great deal of those Greek bonds that are going to be the primary targets,” Vincent Chaigneau, head of interest-rate strategy at Societe Generale SA in London, said an interview. “If the ECB doesn’t participate it won’t be that big a problem. I tend to believe the governments can pressure the banks, either with positive or negative incentives.”

Incentives being considered include giving investors preferred status, higher coupon payments or collateral, said people familiar with the matter who declined to be identified because the talks are in progress.

The cost of insuring Greek debt against default has surged to a record, according to traders of credit-default swaps. Moody’s Investors Service puts the chance of a default over the next five years at 50 percent.

The yield difference, or spread, between 10-year German bunds and Greek securities of a similar maturity was at 1,374 basis points last week.

“If it comes to turmoil in the market, the ECB will probably resume their government bond purchases and keep the banks topped up with liquidity,” said Marco Valli, chief euro- area economist at UniCredit Group in Milan. “But that is as far as they will go.”  

$EURUSD: Contacts talk of large Asian account demand leading to the fresh highs for the day.
13 Jun 14:00:57  

With QE2 coming to an end, and everyone trying to figure out what that means to markets (possible spoiler alert: stocks are going down, and bonds are going up), one way to approach the question is to look at what QE2 actually did.

That's what Goldman Sachs' Alec Phillip did in looking at the Fed's latest Flow of Funds for signs of what QE2 did.

To evaluate how different sectors reacted to QE2, we compare average quarterly flows into Treasuries from each sector in Q4 2010 and Q1 2011 against the average flows from those sectors over the prior year. To compensate for lower Treasury issuance in the latter period, we adjust the flows for average issuance in the period. The change in relative Treasury demand can be used to approximate the difference between the amount of Treasuries that each sector would have bought or sold over the last two quarters absent the Fed's purchases, and what they did buy or sell on average in Q4 2010 and Q1 2011.

...over the last two quarters, the most significant sources of net supply for Treasury securities were households (note that this includes hedge funds), the foreign sector, and banks. The only significant source of new net demand was money market mutual funds, which went from a net seller in the previous period to a net buyer on average over the last two quarters.

Now as for what those sectors did with their money...

So where did sellers of Treasuries invest their funds instead? The sectors that reduced purchases of Treasuries noted above shifted funds into agency-backed securities (this includes agency MBS and debt), corporate bonds, money market funds, and mutual funds. Notably, there was little change in either consumer credit assets or mortgage loans, and sectors responsible for the greatest relative outflows from Treasuries during the period as a whole also reduced investment in equities relative to the average flows over the previous year (i.e., Q4 2009 to Q3 2010).

Read more: http://www.businessinsider.com/where-did-qe2-go-2011-6#ixzz1P9pVQxvV  

The FX regulator says that converting foreign currency will be made easier, marking further steps to ease grips on capital flows
13 Jun 14:14:50  

The flood of Federal Reserve money that has supported Wall Street and the rest of the U.S. economy for 2- years will shrink to a trickle with the conclusion of the Fed's bond purchases announced on Friday.

The Fed said it will buy $50 billion of Treasuries, the final series of government bond purchases that marks the last phase of the $600 billion program it launched in November 2010 to prevent another recession.

As a result, once the purchases are concluded on June 30, the financial sector will receive only a fraction of the roughly $100 billion a month in easy money it has been getting from the Fed.

The conclusion of the Fed's bond-buying program, known as "Quantitative Easing 2," does not mean the stimulus will come to a complete stop. The Fed will reinvest maturing securities, mainly mortgage-related debt, which analysts predict will run at $12 billion to $16 billion per month.

"From a psychological standpoint, it is important for the market to still feel the constant presence of the Fed," said Ralph Axel, interest rate strategist at Bank of America Merrill Lynch in New York.

This gradual approach to unwind policy support is likely needed given investor anxiety over a slowing U.S. economy and the festering public fiscal problem in Europe.

While still a lot of money, it is a huge step down from stimulus levels at the height of the buying campaign, dubbed by markets as QE2 because it was the second round of Fed asset-buying in the wake of the 2008 financial crisis.

A key aim of QE2 was to hold down long-term interest rates to stimulate investment in capital equipment and risky assets. It came almost eight months after the Fed's first round of bond purchases, primarily in mortgage-related securities.

The initial bout of quantitative easing, worth $1.73 trillion, began in December 2008 and ended in March 2010. It was created to stabilize the housing sector, which was the epicenter of the financial turmoil and has yet to show signs of recovery.

The Treasury bond component of the first round of purchases totaled $300 billion, from March to October 2009.

The Fed's buying assets has been controversial from the start. Critics say it is tantamount to printing money, and it has been credited with fueling a stock market rally but blamed for a surge in oil and food prices.

The end of QE2 has been well-flagged. The Fed said at the outset it would run until the end of June 2011.

Still, investors expect stocks, bonds, gold and the euro to fall after it ends, according to a Reuters poll of 64 analysts and fund managers last month.

HOUSING WOES

Come July, the Fed will rely on cash generated from its $1 trillion holding of mortgage-related securities to anchor Treasury yields and support the economy.

Proceeds from Fed's maturing mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and the Government National Mortgage Association (Ginnie Mae) will fluctuate monthly depending on house sales and mortgage refinancings.

Recent evidence suggested the real estate conditions are deteriorating again with single-home home prices dropping below their 2009 low in March. The double-dip in housing will likely be compounded by an abrupt slowdown in job growth in May.

This grim development portends that a housing recovery is farther than previously thought and would take longer for people to sell their homes and to pay off their mortgages. This means mortgage securities will not be prepaid quickly.

"We are still at least two to three years away from seeing signs of even a baby upturn in home prices," said Anthony Karydakis, senior economist at Commerzbank in New York.

Going back to the 1950s, housing starts have typically returned to their pre-recession levels in 1- to 2 years after they hit bottom. But the current housing market is showing "atypical" behavior since its euphoric highs earlier this decade, Karydakis said.

Housing starts are stagnant after 1- years into the current economic recovery and more than a year since the initial bout of bond purchases. They had enjoyed a brief revival due to a federal first-time homebuyer credit program.

"Housing starts have stabilized at very low levels, but there have been no signs of a recovery," Karydakis said.

In April, housing starts fell 10.6 percent to an annualized rate of 523,000 units.  

Ratingagenturen schießen sich einFitch nimmt US-Bonität aufs Korn

Weiterer Warnschuss für die USA: Als letzte der drei großen US-Ratingagenturen nimmt nun auch Fitch die Kreditwürdigkeit der USA unter die Lupe. Genau wie Moody's und Standard & Poor's droht Fitch dem fast zahlungsunfähigen Land mit einer Herabstufung. Feri EuroRating ist da schon einen Schritt weiter.
Ratingagenturen feuern Warnschüsse in Richtung US-Regierung und Kongress: Die Schuldenobergrenze muss erhöht werden, sonst drohen Zahlungsunfähigkeit und Bonitäts-Herabstufung.

Ratingagenturen feuern Warnschüsse in Richtung US-Regierung und Kongress: Die Schuldenobergrenze muss erhöht werden, sonst drohen Zahlungsunfähigkeit und Bonitäts-Herabstufung.

Nach Standard & Poor's (S&P) und Moody's hat auch die dritte große Ratingagentur Fitch eine Herabstufung der US-Bonität in Betracht gezogen. Sollte der Kongress in Washington es bis Anfang August nicht schaffen, die gesetzliche Schuldenobergrenze für den Haushalt zu erhöhen, könnte dies eine Abwertung zur Folge haben, schrieb das Unternehmen in einem am Mittwoch veröffentlichten Report.

Konkret würde man die Kreditwürdigkeit der USA von der Bestnote "AAA" auf "B+" ändern. Fitch begründete den Schritt ähnlich wie die Konkurrenten: Könnten sich die Parteien nicht auf den als Routine geltenden Schritt einigen, würde das eine Regierungskrise bedeuten. Theoretisch würde der erste Zahlungsausfall der USA in der Geschichte drohen - mit möglicherweise dramatischen Konsequenzen auf den Finanzmärkten.

Die USA müssen bis zum 2. August die Grenze von derzeit 14,3 Billionen Dollar (9,79 Billionen Euro) deutlich anheben, um zahlungsfähig zu bleiben. Das Land hatte die Latte eigentlich schon Mitte Mai gerissen, bleibt aber nach den Worten von Finanzminister Timothy Geithner durch «außergewöhnliche Maßnahmen» flüssig.
Feri senkt US-Rating

Die Bad Homburger Feri EuroRating Services AG hat indes als erste Ratingagentur die Bonität der USA von "Aaa" auf "Aa" herabfesruft. Die Agentur bemängelte in ihrer Begründung unzureichende Maßnahmen der Regierung in Washington zur Haushaltskonsolidierung und schwächere Wachstumsaussichten.  

The eurozone heads for break up!

The muddle-through approach to the eurozone crisis has failed to resolve the fundamental problems of economic and competitiveness divergence within the union. If this continues the euro will move towards disorderly debt workouts, and eventually a break-up of the monetary union itself, as some of the weaker members crash out.

The Economic and Monetary Union never fully satisfied the conditions for an optimal currency area. Instead its leaders hoped that their lack of monetary, fiscal and exchange rate policies would in turn see an acceleration of structural reforms. These, it was hoped, would see productivity and growth rates converge.

The reality turned out to be different. Paradoxically the halo effect of early interest rate convergence allowed a greater divergence in fiscal policies. A reckless lack of discipline in countries such as Greece and Portugal was matched only by the build-up of asset bubbles in others like Spain and Ireland. Structural reforms were delayed, while wage growth relative to productivity growth diverged. The result was a loss of competitiveness on the periphery.

All successful monetary unions have eventually been associated with a political and fiscal union. But European moves toward political union have stalled, while moves towards fiscal union would require significant federal central revenues, and also the widespread issuance of euro bonds — where the taxes of German (and other core) taxpayers are not backstopping only their country’s debt but also the debt of the members of the periphery. Core taxpayers are unlikely to accept this.

Eurozone debt reduction or “reprofiling” will help to resolve the issue of excessive debt in some insolvent economies. But it will do nothing to restore economic convergence, which requires the restoration of competitiveness convergence. Without this the periphery will simply stagnate.

Here the options are limited. The euro could fall sharply in value towards – say – parity with the US dollar, to restore competitiveness to the periphery; but a sharp fall of the euro is unlikely given the trade strength of Germany and the hawkish policies of the European Central Bank.

The German route — reforms to increase productivity growth and keep a lid on wage growth — will not work either. In the short run such reforms actually tend to reduce growth and it took more than a decade for Germany to restore its competitiveness, a horizon that is way too long for periphery economies that need growth soon.

Deflation is a third option, but this is also associated with persistent recession. Argentina tried this route, but after three years of an ever deepening slump it gave up, and decided to default and exit its currency board peg. Even if deflation was achieved, the balance sheet effect would  increase the real burden of private and public debts. All the talk by the ECB and the European Union of an internal depreciation is thus faulty, while the necessary fiscal austerity still has – in the short run – a negative effect on growth.

So given these three options are unlikely, there is really only one other way to restore competitiveness and growth on the periphery: leave the euro, go back to national currencies and achieve a massive nominal and real depreciation. After all, in all those emerging market financial crises that restored growth a move to flexible exchange rates was necessary and unavoidable on top of official liquidity, austerity and reform and, in some cases, debt restructuring and reduction.

Of course today the idea of leaving the euro is treated as inconceivable, even in Athens and Lisbon. Exit would impose big trade losses on the rest of the eurozone, via major real depreciation and capital losses on the creditor core, in much the same way as Argentina’s “pesification” of its dollar debt did during its last crisis.

Yet scenarios that are treated as inconceivable today may not be so far-fetched five years from now, especially if some of the periphery economies stagnate. The eurozone was glued together by the convergence of low real interest rates sustaining growth, the hope that reforms could maintain convergence; and the prospect of eventual fiscal and political union. But now convergence is gone, reform is stalled, while fiscal and political union is a distant dream.

Debt restructuring will happen. The question is when (sooner or later) and how (orderly or disorderly). But even debt reduction will not be sufficient to restore competitiveness and growth. Yet if this cannot be achieved, the option of exiting the monetary union will become dominant: the benefits of staying in will be lower than the benefits of exiting, however bumpy or disorderly that exit may end up being.

Nouriel Roubini is chairman of Roubini Global Economics, professor of economics at the Stern School of Business NYU and co-author of ‘Crisis Economics’ that has been recently published in its paperback edition.  

S&P CUTS GREECE TO CCC RATING WITH NEGATIVE OUTLOOK

GREECE LONG TERM CREDIT RATING CUT TO CCC FROM B BY S&P
13 Jun 18:27:06  

(Reuters) - Greece  on Monday became the country with the lowest credit rating in the world  after Standard & Poor's downgraded it by three notches, saying the  agency would consider a likely debt restructuring as a default.

Institute rüsten sich für Ausfall der USA

Einige große Wall-Street-Banken wappnen sich für den Fall einer kurzzeitigen Zahlungsunfähigkeit der USA. Sie bereiten sich auf etwaige Marktturburlenzen vor, falls sich Republikaner und Demokraten nicht auf eine Anhebung der Schuldenobergrenze einigen können.

Hochrangige Bankmanager sagten, sie wollten dann im August den Einsatz von US-Staatsanleihen bei bestimmten Transaktionen reduzieren.
Die Schuldengrenze liegt derzeit bei 14.300 Mrd. Dollar. Sie wird nach Schätzungen des amerikanischen Finanzministeriums Anfang August erreicht. Die Regierung dringt daher auf eine Anhebung des Limits. Bisher haben sich die beiden großen Parteien aber nicht auf einen solchen Schritt verständigt. Gelingt dies bis Anfang August nicht, droht ein Zahlungsausfall, der an den Finanzmärkten heftige Reaktionen auslösen dürfte.

Eine von den US-Banken erwogene Strategie ist, mehr Bargeld vorzuhalten, um es als Sicherheit für Derivategeschäfte und andere Transaktionen zu hinterlegen. Damit würde die Abhängigkeit von US-Staatsanleihen verringert, sagten die Manager, die nicht genannt werden wollten, weil das Thema politisch sensibel ist.
Weltweit halten Investoren einen großen Teil der 9700 Mrd. Dollar an ausstehenden US-Schulden in ihren Portfolios. Fast 40 Prozent davon - rund 4000 Mrd. Dollar - werden laut JP Morgan Chase als Sicherheit für Termin- und Swapgeschäfte oder für Refinanierungsgeschäfte beispielsweise bei den Notenbanken genutzt.
Genau diese Rolle von US-Staatsanleihen im Finanzsystem könnte bei einem Zahlungsausfall der Vereinigten Staaten Verwerfungen auslösen. Die Papiere können bislang aufgrund ihrer hohen Qualität und Liquidität vergleichsweise günstig als Sicherheit eingesetzt werden. Banken oder Abwicklungshäuser verlangen nur einen kleinen Abschlag auf den Wert der Papiere. Sollten die USA ihre Schulden nicht bedienen, könnte sich das ändern. Matthew Zames, hochrangiger Banker bei JP Morgan, hatte schon im April für diesen Fall vor höheren Abschlägen gewarnt, die wiederum unter anderem zu einem scharfen Rückgang der Kreditvergabe führen würden.  

Fed President Fisher repeats his belief that the central bank has done enough to stimulate the economy.
14 Jun 01:34:10  

http://www.n-tv.de/mediathek/videos/wirtschaft/...article3567621.html