Recent comments by Rajesh

If a country defaults on a bond but the ISDA says it's not a default, does the tree really make a sound?

So who was loading up on Emerging Market Stocks?
Argentine markets fall post-default, New York hearing on Friday
| Reuters

The Merval stock index .MERV fell 8.4 percent. Shares traded locally in Argentine energy company YPF (YPFD.BA) were down 9.18 percent at 356 pesos per share. The default is likely to raise borrowing costs for YPF, which issued a $1 billion, 10-year global bond in April.

Asset prices were down sharply but market participants said they still expected either the government or third parties to reach a deal eventually with the holdout investors.

Does 8.4% count as a correction?

Taking care of the muppets:

BES Rises as Goldman Sachs and D.E. Shaw Disclose Stakes - Bloomberg

Goldman Sachs holds a 2.8 percent stake in Banco Espirito Santo after acquisitions July 15 and D.E. Shaw, a New York-based hedge-fund firm, owns 2.7 percent of the stock as of July 14, according to separate regulatory filings from Banco Espirito Santo yesterday after the market close.

Goldman Sachs said today that it “entered into positions in Banco Espirito Santo by virtue of its facilitation of client transactions,” according to an e-mail sent to Bloomberg News.

From Earlier today:
Espirito Santo Plunges After Posting 3.6 Billion-Euro Loss - Bloomberg

The stock sank 42 percent, the most on record, to 20.1 euro cents in Lisbon, valuing the bank at about 1.1 billion euros. The lender’s 750 million euros of 7.125 percent subordinated bonds plunged 21.2 cents on the euro to 54.6 cents, to yield 17 percent, according to data compiled by Bloomberg. Its senior, unsecured 4 percent notes dropped 6.16 cents to 89.2 cents on the euro, to yield 6.9 percent.

emergency hotdog wrote:

a decent sized volcanic eruption would probably seal the deal and create perfect harmony.

Only if the ash cloud prevented any air travel over Europe (including Ukraine.)

These averages don't move me.

Bruce in Tennessee wrote:

It appears the present government in Japan may have the common sense of a birdhouse...

That much? I don't think so.

ResistanceIsFeudal wrote:

"Still Higher than Ever Experienced Previously"?

SHEEP?

I have a Ph.D in studied indifference.

We can tell that rates are spiking:
Germany Government Bond Yield & Interest Rates - Bloomberg 

Germany Bund 10 Year Yield 1.15%

How are the Germans able to pay such high rates?

arthur_dent wrote:

ok, are those like 1964 jobs or 2014 jobs?

110% part time.

I'll take 300,000 jobs added and U-3 of 6.0%

shill wrote:

Prepare for lots of emotions here

Indifference is an emotion. I'm feeling it pretty strongly now. Yaaaaawwwn

shill wrote:

you have the Barbary Pirates....

I thought it was the Pittsburgh Pirates. Did the team move?

Espirito Santo Plunges After Posting 3.6 Billion-Euro Loss - Bloomberg

Banco Espirito Santo SA’s stock plunged by the most on record and the bonds slumped after it was ordered to raise capital following a 3.6 billion-euro ($4.8 billion) first-half net loss.

The Bank of Portugal required the lender to raise the money after it set aside 4.25 billion euros in the first half, mostly to cover souring loans to other members of the Espirito Santo Group. That cut Banco Espirito Santo’s common equity Tier 1 ratio to 5 percent, less than the 7 percent regulatory minimum, according to a statement yesterday. The central bank is also probing the lender’s former managers and suspended executives in charge of audit, compliance and risk management.

“It’s a very substantial capital increase in a difficult environment,” said Benjie Creelan-Sandford, an analyst at Macquarie Bank Ltd. in London. “There is a question whether there are investors given the size of the capital increase needed or if they will need to resort to state aid. It is there as a last resort. The implied size of the capital increase to get them where they were before is about 3 billion euros.”

Are we sure we won't see Treasury rate rise in the third half of the year?

lawyerliz wrote:

Agreed. We should. We will.

Richard Nixon is dead.

FNo one 17 and under admitted
Falling prices on radar as euro inflation drops again
| Reuters

Annual inflation in the euro zone fell in July to its lowest since the height of the financial crisis in 2009, keeping the risk of deflation on policymakers' radar but unlikely to spur the European Central Bank into further policy action.

The slowdown to 0.4 percent, coming amid subdued wage pressures despite a fall in unemployment to a near two-year low, will fuel concerns of a possible broad fall in prices across the 18-nation bloc.

But much of the decline in inflation was down to a sharp fall in volatile energy prices, Thursday's data from EU statistics office Eurostat showed, and the ECB is still waiting to assess the impact of a batch of measures it presented in June to pep up a fragile economic recovery.

When given a choice between a simple, inaccurate model and a complicated, inaccurate model, I prefer the first.

Antipodes wrote:

I shake my cocktail in the shower.

Family blog!

Antipodes wrote:

a Boston shaker.

I thought the Shakers had all died out.

The Republicans plan to sue President Obama for Copyright Infringement claiming his administration is too much like the George W Bush administration.

josap wrote:

What do things look like 10 years from now?

Pretty much like today except for the Islamic Revolution in France, China embracing Democracy and the Cubs winning the World Series.

josap wrote:

the computers that tell the mirrors when to turn for solar farms

The Matrix has you, Neo.

ResistanceIsFeudal wrote:

they care even less than the ruling class.

They couldn't care less!

Feudalism requires caring whether the peasants live or die, because they do useful work.

The Job Creators don't need the farmers, workers or managers.

lawyerliz wrote:

Why did they put that money in a U S bank?

The issuer gives the money to the trustee, BNY Mellon in this case, which then is responsible for distributing to bond holders.

The selective default means that only some bonds are in default. However, the other bonds have a cross-default clause and should the trustees for the other bonds invoke the clause, then all of bonds will be in default and the rating would become default.

Disenchanted with Putin, some Russians vote with their feet
| Reuters

The number of Russians emigrating in the last two years was some five times higher than in the two before Putin began a new six-year term in May 2012, official figures show.

Russia's statistics service Rosstat data shows 186,382 moved abroad in 2013 and 122,751 in 2012, compared to 36,774 in 2011 and 33,578 in 2010.

But experts say the real number is much higher.

"The official statistics on migration are very low," said Mikhail Gorshkov, director of the Russian Academy of Sciences' Institute of Sociology (ISRAS), a state-funded body.

"It's a wake up call for our politicians when someone wants to leave their home country: What is missing for him?"
...
Up to 68 percent of the middle class are state employees, the ISRAS estimates, fuelling support for populist politics such as proposals for a big pay increase for public sector ordered by Putin last year to help him ride out the street protests.

"It's strange but we have more state officials now than the Soviet administration for a population that is two times smaller," Gorshkov said.

Argentina fails to reach debt agreement, default looms
| Reuters

Argentina failed to strike a deal to avert its second default in more than 12 years after talks with holdout creditors ended without a settlement on Wednesday.

The country's economy minister, Axel Kicillof, speaking at a news conference at the Argentine consulate in New York, repeatedly referred to the holdout hedge funds as "vultures" after two days of talks failed to produce an agreement.

"Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default," Daniel Pollack, the court-appointed mediator in the case, said in a statement on Wednesday evening.

Kicillof said Argentina offered the holdouts similar terms as other creditors who recently negotiated with the country as it attempts to regain the good graces of international capital markets that it has been frozen out of since its default. Those terms were rejected, Kicillof said.

After defaulting in 2002, Argentina restructured its debt in 2005 and 2010. More than 90 percent of the bondholders agreed to accept new bonds with reduced payments. The holdouts refused the terms, and were awarded $1.33 billion, plus interest, by a U.S. judge.
...
The country has until midnight Wednesday (0400 GMT on Thursday) to break the deadlock. U.S. District Judge Thomas Griesa in New York was set to prevent Argentina from making the July 30 deadline - representing the end of a 30-day grace period - for a coupon payment on exchanged bonds.

sporkfed wrote:

better accommodations.

Ireland? Is that why they're driving the natives to immigrate? So they can have the island to themselves?

If Venezuela were important, it would not be allowed to fail.
If Russia were important, it would not be allowed to fail.
If China were important, whose got enough money to bail them out?

The debtors that took the exchange got thirty cents on the dollar but there is a clause that says if Argentina agrees to a better deal with another party, then the exchanged bonds get the same deal. The clause does not expire until the end of the year.

traderwalt wrote:

Not sure if it's 1201AM Argentina, N.Y, or London time

As the bonds are issued under New York law, I would assume end of business New York time: 5 P.M.

rickrolled wrote:

so everyone should buy a house now?

so everyone should buy a three or more houses now?

T minus sixteen months and counting...

ResistanceIsFeudal wrote:

it's not really a secret

So Economics is hard have an ignore button too?

ResistanceIsFeudal wrote:

colloidal silver, charcoal pills, iodine and flak jackets

Who knew the end of the world was GDP positive?

KarmaPolice wrote:

The American consumer is flat broke

But American corporations have plenty of money to turn into unsalable goods which they book profits on immediately.

The consumption numbers which I was tracking said slow/moderate growth. The production numbers suggested strong GDP growth. It looks like they were both right.

Holy inventory instability, Batman!

Cr wrote

Change in private inventories added 1.66 percentage points to growth after subtracting 1.16 in Q1.

Whipsaw!

Your mother was a hamster.
and your father smelt of elderberries.

French Taunting - Monty Python and the Holy Grail - YouTube

mr_clueless wrote:

i'm sure it has nothing to do with that.

We won't know until if blows up.

X-12-ARIMA 

X-12-ARIMA is the U.S. Census Bureau's software package for seasonal adjustment. It can be used together with many statistical packages, such as Gretl or EViews which provides a graphical user interface for X-12-ARIMA, and NumXL which avails X-12-ARIMA functionality in Microsoft Excel.

mr_clueless wrote:

is there a formal term?

The seasonal adjustment factor is calculated based on the recent history of the value (price, volume, etc.) Typically it focuses on the behavior of the last five years, with the prior year being given the most weight.

mr_clueless wrote:

what does it mean to seasonally adjust prices?

There is a pattern to house prices. Prices rise during the spring buying season and then fall into the winter months. The seasonal adjustment tries to make April prices comparable to May prices. May prices are normally higher than April prices, once the adjustment is applied you can see if the rise in May prices is more (or less) than the 'normal' increase between the months.

I keep hearing that inflationary expectations are well anchored but 10-yr bunds yielding 1.1% makes me think that expectations are not well anchored.