World economy talk

[uls]

debt ceiling deal

dollar up

[uls]

Brent crude oil spot and futures prices

CBY00 (Cash) 118.03s
CBU11 (Sep '11) 119.42
CBV11 (Oct '11) 119.14
CBX11 (Nov '11) 119.07
CBZ11 (Dec '11) 119.00

[ghosthunter]

Uls, so whats your prediction for the dollar? Slow recovery or steady decline?

[uls]

as long as ma-raise yung debt ceiling and wala ratings downgrade magrerecover ang USD

dollar massacre last week was coz of fear the debt ceiling won't be raised causing USG default

for now a bit of relief coz they got a deal na. but still to be voted on pa

[uls]

long term dollar value will keep falling

the world is sick of USD reserve currency status

[Ry_Tower]

long term dollar value will keep falling

the world is sick of USD reserve currency status

What would replace it then? I read before that the Yuan is not that attractive pa rin eh.

[tidus1203]

Right 3 years ago, still right now. GOLD! If you want paper get Swiss Franc or Japanese Yen been preaching this for the last 3 years. Di na nagpapakita mga critics dati cause mapapahiya lang sila if they look at the prices of Gold, CHF, and JPY now...

[uls]

What would replace it then? I read before that the Yuan is not that attractive pa rin eh.

di pwede yuan

it's not fully convertible -- meaning you can't officially buy large amounts of yuan outside China. the yuan isn't even traded in global forex markets

China's authoritarian govt controls the value of the yuan

to be a reserved currency, China has to let the value of the yuan be determined by the market

will China allow that? i don't think so

China has capital controls

to be a reserve currency, China has to allow foreigners to hold yuan on a large scale

and how can there be demand for yuan when China doesnt have a bond market as deep and liquid as the US or Japan or Germany or UK?

when you're holding large amounts of currency, you gotta have somewhere to park the currency

[Monseratto]

After opening 1.13% up, DOW lost steam and is in the negative. There is a threat of a downgrade pa ata because the debt ceiling deal is 2 trillion dollar short...

[uls]

after the GDP number last week, more confirmation the US economy is slowing

the ISM number is way below expected -- 50.9 (expected 54.5)

risk off

[uls]

[uls]

freaking risk off

US 10 yr yield

[eld]

^ I'll bet they'll go for tech patents since getting bigger is not always the way to go. They can just trounce their rivals by being a step or two ahead.

BTT: Most gov't ata is like that, spending more than what they collect from taxes. I just don't know if the Swiss is included.

Switzerland hosted this year's Bilderberg meeting. (Oops, the what?! Ngayon niyo pa lang narinig 'yan, 'no? ) Care to guess the previous two locations? That's right, Spain and Greece.

[eld]

long term dollar value will keep falling

the world is sick of USD reserve currency status

Tama 'yan. USA is entering banana republic status. Old Yeller's time has come. The top dog is about to replaced by a dragon. Pero bago lahat 'yan, giyera muna.

(btw, ba't walang kuminkindat na smiley?)

[eld]

Guys, just so you know, Goldman Sachs (aka the world's biggest oil company ) is now hoarding a quarter (that's 25%!!!) of all of the world's existing supply of aluminum. Kaya pala biglang tumaas presyo ng mango nectar na binibili ko. 16.50 lang then biglang naging 19.40 na isa in just a span of 1-2 weeks.

[uls]

Guys, just so you know, Goldman Sachs (aka the world's biggest oil company ) is now hoarding a quarter (that's 25%!!!) of all of the world's existing supply of aluminum. Kaya pala biglang tumaas presyo ng mango nectar na binibili ko. 16.50 lang then biglang naging 19.40 na isa in just a span of 1-2 weeks.

ya good you mentioned that

Metro International Trade Services

Metro International Trade Services LLC

that's a warehousing company owned by Goldman Sachs

the company operates warehouses in Detroit

in the the warehouses are over a million tons of aluminum. that's around 1/4 of global aluminum inventory

Goldman makes money 2 ways -- from rental income and from driving up the price of aluminum

[uls]

this whole debt ceiling drama demonstrated the power of the tea party movement in the states

the tea party congressmen almost prevented the raising of the debt ceiling which would have led to USG default

there are people who say Rick Santelli gave rise to the tea party movement with this rant 2 yrs ago

[ame=http://www.youtube.com/watch?v=jiCOb49vVVM]‪Rick Santelli Rant‬‏ - YouTube[/ame]

[uls]

Italy 10 yr yield


Spain 10 yr yield


consider the experiences of Greece, Ireland and Portugal

the point of no return is reached when their 10-yr govt bonds yield 7% in the secondary market

[uls]

Italy




--

[Monseratto]

BBC News - Spain PM postpones holiday as debt fears hit record

Spain's Prime Minister Jose Luis Zapatero has been forced to postpone his holiday as investors continue to flee his country's debt.

On Tuesday, the euro reached a record low against the Swiss franc. The Swiss currency is usually considered a so-called safe haven in times of turmoil.

Meanwhile, Spain's main stock index fell for the second day in a row, closing down 2.2% after tumbling 3.2% a day earlier. Italy's index fell 2.5%.

As the bond yields rise, Italy and Spain have seen their borrowing costs rise sharply in recent weeks.

Italy's 10-year bonds rose above 6% on Tuesday - a rate considered unsustainable.

The premium over the equivalent German debt also reached a record spread of 3.74 percentage points.

Italy has the largest sovereign debt of any European country.

As their countries' bond yields rise, it becomes more expensive for governments to sell more debt, which leads to a vicious circle as the old debt comes due for repayment.

On Tuesday, Germany - the biggest economy in Europe - saw its bond yield drop below the inflation rate for first time since reunification.

This suggests that investors are now so scared, they are willing to sacrifice a return on their investment to hold the least risky bonds in Europe.