Sovereign Debt

July 6, 2011

Greece Referendum on European Bailout – 5 Points you Want to Know

Greece Referendum is set to become the hottest media topic related to the European Debt Crisis in the coming months.In a totally surprising move Greek Prime Minister George Papandreou called a referendum and a parliamentary confidence vote on 31st October just a week after the European leaders had agreed on a package to .Papandreou’s personal and government popularity have plunged amid fresh austerity measures that sparked a wave of social unrest.The PM is calling this vote probably to bolster his government as it loses support of the masses
July 5, 2011

Greek Debt Deal – Bondholders take 50% Loss- Who Wins and Loses

According to reports coming from Europe where the summit of major European leaders took place to resolve the growing debt crisis,a deal has been reached on Greek debt.The Euro 350 billion debt which dwarfs the size of the negatively growing Greek economy has been a major source of instability in the last 2 years.The private holders of the Greek government bonds have agreed to take a 50% writeoff on their holdings.This means that if they hold Euro 100 of bonds they have become Euro 50 now as the rest has been written off as bad debt.Not that it was not apparent as Greek CDS and Greek bonds were touching all times lows in the secondary market.In fact the only buyers of Greece bonds were the European Central Bank and the Greek banks.The capital markets had been going up in the last month in the hope of some sort of resolution.The deal does not look like a win win as there will be some big losers in this deal (though they were already losing for some time).Nicolas Sarkozy announced the deal which would be voluntary in nature so that the CDS would not be invoked.Here are the winners and losers from this deal
April 15, 2011

Why did it take Spain 3 years to stops/changes subsidies to Solar Power Plants getting Feed in Tariff through Fraud

Spain has started cracking down on Solar Power Plants which are making huge profits through illegal Feed in Tariffs which they should not get.Note Spain had seen a massive boom in solar installations in 2008 due to unusually large ROI driven by high Feed in Tariffs.FIT are electricity rates which are higher than wholesale electricity rates paid to renewable energy power plants in order to make them competitive with cheaper fossil fuel power plants.Seeing a huge increase in the subsidy burden Spain has pretty much killed the solar market in 2009,however the problems of Fiscal Deficit has made Spain reconsider the tariffs being given to even older solar power plants.After a lot of controversy,Spain changed the FIT rules in the middle of the game through a retroactive FIT Law drawing howls of protest from solar investors like pension funds which have sued the government
August 16, 2010

Are Bond Markets signalling Greek Contagion Redux?

This almost 30% decline in US yield is due to a combination of factors like expectations of more monetary easing by Fed,deflation worries and disappointing US economic data.In lockstep with the the US Treasury yields,the German bunds have also been rising.The rise in German Bunds is despite very strong German economic data.The German economy expanded at the fastest pace in 23 years on Rising Exports.So the fall in Bund yield is confusing when seen in terms of the US Treasury and Economy relationship
July 19, 2010

European Crisis is alive and kicking – IMF Rejects Hungary Bailout while Moody downgrades Ireland

The recent recovery in Euro from 1.2 to 1.3 USD and the strength of the stock markets would make you think that the Greek Contagion is […]
July 14, 2010

German Exporters make Hay from Euro weakness as Global Trade Imbalances grow even Bigger

.The almost 20% peak to trough fall has led to Germany's already strong exporting machine to generate even greater exports.While the rest of the European countries like Spain,Greece and Portugal don't really have the industry to benefit from Euro weakness,Germany has a massive industries to do so.
July 6, 2010

Green Investing climate in Spain improves dramatically with Wind and Solar Thermal Industries reaching Agreement with Government over Subsidy Cuts

Spanish Government Facing a Tough Fiscal Situation;Plans Green Energy Subsidy Change The Spanish Government has been  facing a tough budgetary situation due to sovereign debt problems […]
June 22, 2010

European Crisis resumes with French Financial Sector facing Ratings Cut over Balance Sheet Concerns

The European Crisis which had been put into the backburner over the past week has resumed after the Much Ado about Nothing – Yuan Appreciation games.The […]
June 21, 2010

Language of Money makes Australia roll out the Red Carpet for Chinese investment despite Rio Tinto arrests

Language of Money papers over Rio Tinto tensions Australia has rolled out the proverbial red carpet for visiting Chinese leadership signing billion dollar agreements on mutual […]
June 19, 2010

Spain may use a backdoor approach in cutting Solar Subsidy to rein in Renewable Energy Costs

Background on Spanish Government’s proposal to cut Solar Subsidy on Existing Plants The Spanish government has been actively discussing with industry groups on how to reduce […]
June 17, 2010

Impact of Spain's proposal to retroactively implement an "Industry Killing" 30% Solar Subsidy Cut on Existing Solar Plants

According to the Spanish Solar Power Lobby ASIF,the Spanish government (under Pressure with Spanish Banks facing Funding Problems and Spanish Bond Yields Rising) is proposing a […]
June 15, 2010

After Africa China finds another distressed country in desperate need of Chinese capital- "Greece"

China with its $2 Trillion Foreign Exchange Reserves is on the constant lookout for cheap assets around the world.With its massive horde of Dollars and Euros […]
June 8, 2010

Swiss Central Bank surrenders against Economic Forces in fight to weaken the Swiss Franc

The Swiss Central Bank has added almost 50% to its foreign currency reserves in the month of May 2010 alone to prevent the Swiss Franc from […]
May 7, 2010

Greek Crisis Casualty – IPOs all over the World get pushed to the Backburner

One of the biggest causalities of The Greek crisis has  been the  world IPO market.Number of companies all over the world are deferring their IPOs seeing […]