jackovesk
30th October 2011, 14:45
Investors claim Brussels deal not enough
October 31, 2011.
VETERAN investor George Soros has attacked the lack of leadership at the top of the euro zone and said the new Brussels ''deal'' to solve the debt crisis would last only between ''one day and three months''.
http://images.theage.com.au/2011/10/30/2740506/soros-200x0.jpg
George Soros: 'Given the magnitude of the crisis it is again too little too late
Mr Soros, who achieved worldwide fame when he bet against sterling remaining within the Exchange Rate Mechanism in the 1990s, said the reduction in Greek debt was insufficient to stop an economic decline in Greece that would lead to greater social unrest.
His words come as the euro zone appeared to be heading for further economic trouble as investors started to express scepticism about last week's rescue deal. Goldman Sachs said at the weekend that the euro zone countries were heading for a ''mild recession'' as confidence waned.
''Given the magnitude of the crisis it is again too little too late,'' Mr Soros said of the Brussels deal. ''It will bring relief partly because the markets were so obsessed by the lack of leadership. The mere fact something was achieved was a major relief and it will be good for any time from one day to three months.
''Unfortunately it is not the last crisis because the fundamental issues have not been settled. It is clear that the amount of debt that Greece has accumulated and is accumulating is untenable and the country is effectively insolvent.''
Mr Soros said that many banks might not voluntarily join the deal and as they will want to wait for the insurance offered by the credit default swaps they hold against the debt to be triggered. At present, because the haircut is voluntary, European leaders have said the Greek default is not considered a ''credit event'' that would spark CDS payouts and possibly a new financial crisis.
''Unfortunately, the 50 per cent haircut is effectively less than a 20 per cent reduction in the overall debt [for Greece] because it only involves the private sector and excludes all the debt that is held by the European Central Bank and the other public authorities, and also the debt held by Greece because the banks, of course, will now be insolvent and the pension funds also,'' Mr Soros said.
''It is not at all clear that the private sector will deliver this voluntary cut because many of the banks are hedged by holding credit default swaps and this doesn't trigger the credit default swaps. As a private institution you could argue that it is the fiduciary responsibility of the board to look to the benefit of the bank rather than the common benefit.
''So, from the banks' point of view, it is better to have a credit event where the CDS become active and protect them from the loss. That is an unsolved problem which may emerge in the next few weeks.
''The failure in terms of governance and the lack of understanding among the leadership of how to deal with the market is really quite astounding. You have to lead markets, that is what they don't understand.''
Yesterday, Jean Claude-Trichet, the outgoing chairman of the ECB, denied allegations that the bank was being used for political ends. He insisted that any ECB decisions were based on the needs of fiscal policy and that the bank was ''completely independent''.
http://www.theage.com.au/world/investors-claim-brussels-deal-not-enough-20111030-1mqdu.html
PS - Reading Between the Lines, tells me that Soros knows only to well the CDS's are the very thing that he and his Criminal mates knowingly want excised..!
The CDS's are the Very Reason Greece got into Trouble in the 1st Place..!
Soros and his Ilk will tell you the CDS's are the Central Banks Insurance Policy, knowing only to well they are Derivatives backed up by nothing but 'Thin Air' forced upon the Greek People to pay a Debt they NEVER owed..! Forced upon them by their Corrupt Govt. and the likes of Goldman Sachs and the European Central Banks..!
Soros - You piece of Sh#t, your Day is coming you Crook..!
Mr Soros said that many banks might not voluntarily join the deal and as they will want to wait for the insurance offered by the credit default swaps they hold against the debt to be triggered.
How can CDS's be classified as Insurance when they are just a Stroke on a Computer Screen Backed-Up by ABSOLUTELY NOTHING..!
October 31, 2011.
VETERAN investor George Soros has attacked the lack of leadership at the top of the euro zone and said the new Brussels ''deal'' to solve the debt crisis would last only between ''one day and three months''.
http://images.theage.com.au/2011/10/30/2740506/soros-200x0.jpg
George Soros: 'Given the magnitude of the crisis it is again too little too late
Mr Soros, who achieved worldwide fame when he bet against sterling remaining within the Exchange Rate Mechanism in the 1990s, said the reduction in Greek debt was insufficient to stop an economic decline in Greece that would lead to greater social unrest.
His words come as the euro zone appeared to be heading for further economic trouble as investors started to express scepticism about last week's rescue deal. Goldman Sachs said at the weekend that the euro zone countries were heading for a ''mild recession'' as confidence waned.
''Given the magnitude of the crisis it is again too little too late,'' Mr Soros said of the Brussels deal. ''It will bring relief partly because the markets were so obsessed by the lack of leadership. The mere fact something was achieved was a major relief and it will be good for any time from one day to three months.
''Unfortunately it is not the last crisis because the fundamental issues have not been settled. It is clear that the amount of debt that Greece has accumulated and is accumulating is untenable and the country is effectively insolvent.''
Mr Soros said that many banks might not voluntarily join the deal and as they will want to wait for the insurance offered by the credit default swaps they hold against the debt to be triggered. At present, because the haircut is voluntary, European leaders have said the Greek default is not considered a ''credit event'' that would spark CDS payouts and possibly a new financial crisis.
''Unfortunately, the 50 per cent haircut is effectively less than a 20 per cent reduction in the overall debt [for Greece] because it only involves the private sector and excludes all the debt that is held by the European Central Bank and the other public authorities, and also the debt held by Greece because the banks, of course, will now be insolvent and the pension funds also,'' Mr Soros said.
''It is not at all clear that the private sector will deliver this voluntary cut because many of the banks are hedged by holding credit default swaps and this doesn't trigger the credit default swaps. As a private institution you could argue that it is the fiduciary responsibility of the board to look to the benefit of the bank rather than the common benefit.
''So, from the banks' point of view, it is better to have a credit event where the CDS become active and protect them from the loss. That is an unsolved problem which may emerge in the next few weeks.
''The failure in terms of governance and the lack of understanding among the leadership of how to deal with the market is really quite astounding. You have to lead markets, that is what they don't understand.''
Yesterday, Jean Claude-Trichet, the outgoing chairman of the ECB, denied allegations that the bank was being used for political ends. He insisted that any ECB decisions were based on the needs of fiscal policy and that the bank was ''completely independent''.
http://www.theage.com.au/world/investors-claim-brussels-deal-not-enough-20111030-1mqdu.html
PS - Reading Between the Lines, tells me that Soros knows only to well the CDS's are the very thing that he and his Criminal mates knowingly want excised..!
The CDS's are the Very Reason Greece got into Trouble in the 1st Place..!
Soros and his Ilk will tell you the CDS's are the Central Banks Insurance Policy, knowing only to well they are Derivatives backed up by nothing but 'Thin Air' forced upon the Greek People to pay a Debt they NEVER owed..! Forced upon them by their Corrupt Govt. and the likes of Goldman Sachs and the European Central Banks..!
Soros - You piece of Sh#t, your Day is coming you Crook..!
Mr Soros said that many banks might not voluntarily join the deal and as they will want to wait for the insurance offered by the credit default swaps they hold against the debt to be triggered.
How can CDS's be classified as Insurance when they are just a Stroke on a Computer Screen Backed-Up by ABSOLUTELY NOTHING..!