Tuesday, June 26, 2012
Spain Borrowing Costs Triple In One Month
Not much to add to Reuters summary of the overnight Spanish bill auction. The good news: the country that is not Uganda sold €3.08 billion compared to a range sought of €2-3 billion. The bad news: the price paid to sell this debt more than makes up for any optics that this was a good deal. "Spain's short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country's precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks. The yield paid on a 3-month bill was 2.362 percent, up from just 0.846 percent a month ago.
For six-month paper, it leapt to 3.237 percent from 1.737 percent in May... Spain sold 3.08 billion euros of its short-term debt on Tuesday, slightly above its target amount, even as the Treasury paid the highest rates to sell the paper since November and met with falling demand from the country's struggling banks. The Treasury sold 1.6 billion euros of a 3-month bill, and 1.48 billion euros of a 6 month bill, which together was just above the 2-3 billion euro target set.
The Treasury has overshot its sales target in recent auctions, showing it still is capable of selling its debt even if has to rely on domestic banks to do so as international investors avoid Spanish debt." Here's a hint to whoever is pretending to be in charge of Spanish finances: selling more debt than the "max" just to show you still have bond market access (i.e., debt bought by just downgraded Spanish banks) while paying ridiculous interest on this "optical success" is about the dumbest thing a broke country can do. But who are we to judge. We will leave that to the bond market. Below we show the yield on the Spanish 10 Year, which in two days has retraced the entire move tighter in the past week.
Zero Hedge
Zero Hedge
Moody's downgrades $64 billion of U.S. muni debt
Moody's Investors Service on Friday cut ratings on $64 billion of municipal bonds, including debt owed by 1,675 local and state governments, because the obligations rely on 15 global banks the Wall Street credit agency sees as less steady.
Moody's on Thursday downgraded big banks such as Citigroup that provided "letters of credit, standby bond purchase agreements, and other liquidity facilities" backing $45 billion of tax-free debt.
Separately, Moody's said it was also reducing ratings on $19 billion of pre-paid natural gas bonds issued by 24 utilities in Tennessee, Kentucky, Texas and elsewhere because the downgraded banks support certain payment obligations on the bonds.
Moody's cut the credit ratings of 15 of the world's leading banks by one to three notches to reflect rising risks of losses they face in volatile capital markets.
Such ratings cuts typically hurt prices of outstanding bonds and raise interest rate costs for issuers, but they had little effect on Friday on muni bond prices.
The lion's share of the state and local government debt downgrades - 1,163 - hit obligations that were rated solely on the support provided by the downgraded banks.
The short-term ratings of 152 U.S. municipal obligations that were rated based on standby bond purchase agreements and other third party supports also were cut.
Also downgraded were short-term ratings of 137 series of tender option bonds that relied on third party facilities. Tender option bonds typically have floating rates and carry a promise that the holder can sell the security at certain times.
The long-term ratings of 40 series of tender option bonds were cut if their underlying asset was a custodial receipt whose rating depends on support from one of the 15 banks.
Some 223 public finance sector obligations supported by letters of credit were downgraded because their long-term ratings were based on a joint default analysis, Moody's said.
The agency said the downgrades of the two dozen issues of gas prepayment bonds, a form of debt public utilities use to lock in discounted supplies of fuel, were also knock-on actions from Thursday's rating cuts.
Citigroup, Goldman Sachs Group, Inc, Credit Agricole Corporate & Investment Bank, JPMorgan Chase, Morgan Stanley, Royal Bank of Canada and Societe Generale were among the banks downgraded, Moody's said.
Reuters
IDF to deploy radar systems along Egyptian border
The IDF has decided to deploy radar systems along the border with Egypt to detect and warn of rocket attacks.
The radar systems will be similar to those that are deployed along Israel’s border with the Gaza Strip and Lebanon and are used to detect the launching of rockets into Israel and assist in determining their trajectory as well as the projected target.
The information produced by the radar is then transmitted to the Home Front Command – which is responsible for activating early warning systems like air sirens – to alert residents of the areas about to be hit.
The decision to deploy the radar systems along the border comes amid concern that terror groups operating in Sinai will escalate their rocket attacks against Israel. The IDF believes that groups based in Gaza are operating freely in Sinai and in some cases even activate local Beduin to carry out attacks on their behalf.
Earlier this month, two 122- mm. Katyusha rockets were fired from Sinai and landed near Mitzpe Ramon and Uvda.
In April, a Grad-model Katyusha struck Eilat.
Israel has called on the Egyptian government to increase its efforts to regain control over Sinai and to root out terror groups which operate there. However, predictions are that this will not happen, particularly following the announcement on Sunday that Mohamed Morsy of the Muslim Brotherhood was elected president.
“The more significant problem is what’s happening in Sinai, where terror bases are being established and we expect the Egyptians to restore their sovereignty there,” IDF Chief of Staff Lt.-Gen. Benny Gantz said last Tuesday.
Under the current setup within the military, the Israel Air Force is responsible for operating the radars and detecting incoming aerial threats like missiles, and the Home Front Command is responsible for activating early warning systems like air raid sirens.
The two branches currently operate individual commandand- control centers in the Kirya military headquarters in Tel Aviv but there are plans to combine the two as part of an effort to increase coordination and shorten the time it takes from detection until sirens are sounded.
Jerusalem Post
Tropical Storm Debby breaks record with early debut
An unusually early spate of tropical storms has been keeping forecasters busy this year, and now Tropical Storm Debby, the fourth named storm of the Atlantic hurricane season, has set a record – this season marks the first time in more than 150 years that so many storms have showed up so early. “This is first time we’ve had four tropical storms develop in the Atlantic basin before July 1,” said Dennis Feltgen, a meteorologist and spokesman for the National Hurricane Center in Miami, Fla. U.S. records for tropical storms and hurricanes stretch back to 1851, Feltgen told OurAmazingPlanet.
And although Tropical Storm Debby has broken the century-and-a-half-long record, there is certainly a chance that four storms may have formed this early in the past, yet escaped notice simply because forecasters didn’t have the tools to see them. “We figure that back in the day there could have been several storms per season that could have been missed,” Feltgen said. “We didn’t have satellites.” Forecasters relied largely on ship reports and on firsthand observations when a storm hit land.
Where is Debby going? Forecast models show Debby making landfall along the northern Florida Gulf Coast later this week. Dubbed “Debby Downer” in some local media reports, it could dump more than a foot (30 cm) of rain in some areas of the state, with isolated amounts of more than two feet in north Florida, the hurricane center said. Flash flood warnings were in effect for many areas, including some where streets were already under water, and emergency management officials cautioned that inland flooding was associated with more than half the deaths from tropical cyclones in the United States over the last 30 years.
The Extinction Protocol
Where is Debby going? Forecast models show Debby making landfall along the northern Florida Gulf Coast later this week. Dubbed “Debby Downer” in some local media reports, it could dump more than a foot (30 cm) of rain in some areas of the state, with isolated amounts of more than two feet in north Florida, the hurricane center said. Flash flood warnings were in effect for many areas, including some where streets were already under water, and emergency management officials cautioned that inland flooding was associated with more than half the deaths from tropical cyclones in the United States over the last 30 years.
The Extinction Protocol
Putin: Don't rush to strike Iran
President Vladimir Putin expressed his reservations over the prospect of a military strike in Iran, urging Israel Monday to learn from negative US experience in Afghanistan and Iraq.
Putin's comments were made in a meeting with Shimon Peres in Jerusalem, after Israel's president asked the visiting leader to speak out on the Iran issue.
"Look at what happened to the Americans in Afghanistan and in Iraq. I told Obama the same thing," the visiting president said in a meeting with his Israeli counterpart, cautioning against hasty military action. "There is no need to do things too quickly; one should not act without thinking first."
"Iraq has a pro-Iranian regime after everything that has happened there. These things should be thought out ahead of time before doing something one will regret later," he said. "One should not act prematurely."
'Russia wants peace for Israel'
Earlier in the evening, Putin said that his country "has a national interest in guaranteeing peace and tranquility for Israel."
The Russian president noted that the former Soviet Union supported the State of Israel's establishment, adding that his talks earlier Monday with Prime Minister Benjamin Netanyahu were constructive and pertained to the need to boost strategic ties between the two countries.
Friendly visit (Photo: Gil Yohanan)
Speaking at a state dinner held for his Russian counterpart, Peres expressed his hope that Putin would contribute to the achievement of peace in the region, making note of his "warm attitude" towards the Jewish state.
Peres added that "the Iranian people are not our enemy. Israel does threaten their existence. It is Iran's current regime that indentifies itself as an enemy of Israel and a threat to its existence."
BIbi: Israel, Russia agree on Iran
Israel and Russia agree that Iranian nuclear weapons would constitute grave danger for the Jewish state and for the whole world, PM Netanyahu said earlier Monday following his meeting with Putin.
"I believe that we should be doing two things now: Boosting the sanctions (on Iran) and also boosting the demands," Netanyahu said.
Putin and Netanyahu (Photo: Marc Israel Sellem)
The Russian president said the two leaders "spoke in detail about the Syria issue and about the Iranian nuclear program."
"I would like to stress again that the negotiations were detailed and very effective," he said. "I'm convinced that the cooperation between Russia and Israel will develop later as well, and this matter certainly meets the demands and interests of both states, in the region and in the world at large."
'Friendly ties'
Speaking to the media after meeting PM Netanyahu, Putin thanked Israel's leadership for inviting him to visit.
"My visit here reinforced the assumption that we have friendly relations, and these are not just friendly relations," Putin said. "This is a solid basis for building dialogue and partnership."
Putin greeted by PM's wife (Photo: Amos Ben Gershom, GPO)
Earlier Monday, President Peres greeted Putin in a dedication ceremony for a memorial to the Red Army’s victory over Nazi Germany in Netanya. Peres said he is certain that Russia, which fought fascism, will not tolerate similar threats, "not an Iranian threat and not bloodshed in Syria."
Signal to Egypt
During Monday's press conference, Netanyahu also addressed regional realities, referring to the Islamist victory in Egypt's presidential elections.
The PM said that Israel "appreciates the democratic process in Egypt" and respects the Egyptian election results.
"We look forward to working together with the new administration on the basis of the peace agreement between us," Netanyahu said. "I believe peace is important for Israel. I believe peace is important for Egypt."
Meanwhile, President Putin addressed the Israeli-Palestinian conflict, asserting that "against the backdrop of events in the Middle East, it is important to resolve longtime conflicts."
"We urge all sides to renew negotiations; this is the only way to resolve the problem," the Russian president said.
"Look at what happened to the Americans in Afghanistan and in Iraq. I told Obama the same thing," the visiting president said in a meeting with his Israeli counterpart, cautioning against hasty military action. "There is no need to do things too quickly; one should not act without thinking first."
"Iraq has a pro-Iranian regime after everything that has happened there. These things should be thought out ahead of time before doing something one will regret later," he said. "One should not act prematurely."
'Russia wants peace for Israel'
Earlier in the evening, Putin said that his country "has a national interest in guaranteeing peace and tranquility for Israel."
The Russian president noted that the former Soviet Union supported the State of Israel's establishment, adding that his talks earlier Monday with Prime Minister Benjamin Netanyahu were constructive and pertained to the need to boost strategic ties between the two countries.
Friendly visit (Photo: Gil Yohanan)
Speaking at a state dinner held for his Russian counterpart, Peres expressed his hope that Putin would contribute to the achievement of peace in the region, making note of his "warm attitude" towards the Jewish state.
Peres added that "the Iranian people are not our enemy. Israel does threaten their existence. It is Iran's current regime that indentifies itself as an enemy of Israel and a threat to its existence."
BIbi: Israel, Russia agree on Iran
Israel and Russia agree that Iranian nuclear weapons would constitute grave danger for the Jewish state and for the whole world, PM Netanyahu said earlier Monday following his meeting with Putin.
"I believe that we should be doing two things now: Boosting the sanctions (on Iran) and also boosting the demands," Netanyahu said.
Putin and Netanyahu (Photo: Marc Israel Sellem)
The Russian president said the two leaders "spoke in detail about the Syria issue and about the Iranian nuclear program."
"I would like to stress again that the negotiations were detailed and very effective," he said. "I'm convinced that the cooperation between Russia and Israel will develop later as well, and this matter certainly meets the demands and interests of both states, in the region and in the world at large."
'Friendly ties'
Speaking to the media after meeting PM Netanyahu, Putin thanked Israel's leadership for inviting him to visit.
"My visit here reinforced the assumption that we have friendly relations, and these are not just friendly relations," Putin said. "This is a solid basis for building dialogue and partnership."
Putin greeted by PM's wife (Photo: Amos Ben Gershom, GPO)
Earlier Monday, President Peres greeted Putin in a dedication ceremony for a memorial to the Red Army’s victory over Nazi Germany in Netanya. Peres said he is certain that Russia, which fought fascism, will not tolerate similar threats, "not an Iranian threat and not bloodshed in Syria."
Signal to Egypt
During Monday's press conference, Netanyahu also addressed regional realities, referring to the Islamist victory in Egypt's presidential elections.
The PM said that Israel "appreciates the democratic process in Egypt" and respects the Egyptian election results.
"We look forward to working together with the new administration on the basis of the peace agreement between us," Netanyahu said. "I believe peace is important for Israel. I believe peace is important for Egypt."
Meanwhile, President Putin addressed the Israeli-Palestinian conflict, asserting that "against the backdrop of events in the Middle East, it is important to resolve longtime conflicts."
"We urge all sides to renew negotiations; this is the only way to resolve the problem," the Russian president said.
Ynet
Subscribe to:
Posts (Atom)