Global Macro Trading Journal
- Thread starter Daal
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Soros plan No XVII to save the Eurozone
"My seven-point plan to save the eurozone
George Soros
1) Member states of the eurozone agree on the need for a new treaty creating a common treasury in due course. They appeal to European Central Bank to co-operate with the European financial stability facility in dealing with the financial crisis in the interim â the ECB to provide liquidity; the EFSF to accept the solvency risks.
2) Accordingly, the EFSF takes over the Greek bonds held by the ECB and the International Monetary Fund. This will re-establish co-operation between the ECB and eurozone governments and allow a meaningful voluntary reduction in the Greek debt with EFSF participation.
3) The EFSF is then used to guarantee the banking system, not government bonds. Recapitalisation is postponed but it will still be on a national basis when it occurs. This is in accordance with the German position and more helpful to France than immediate recapitalisation.
4) In return for the guarantee big banks agree to take instructions from the ECB acting on behalf of governments. Those who refuse are denied access to the discount window of the ECB.
5) The ECB instructs banks to maintain credit lines and loan portfolios while installing inspectors to control risks banks take for their own account. This removes one of the main sources of the current credit crunch and reassures financial markets.
6) To deal with the other major problem â the inability of some governments to borrow at reasonable interest rates â the ECB lowers the discount rate, encourages these governments to issue treasury bills and encourages the banks to keep their liquidity in the form of these bills instead of deposits at the ECB. Any ECB purchases are sterilised by the ECB issuing its own bills. The solvency risk is guaranteed by the EFSF. The ECB stops open market purchases. All this enables countries such as Italy to borrow short-term at very low cost while the ECB is not lending to the governments and not printing money. The creditor countries can indirectly impose discipline on Italy by controlling how much Rome can borrow in this way.
7) Markets will be impressed by the fact that the authorities are united and have sufficient funds at their disposal. Soon Italy will be able to borrow in the market at reasonable rates. Banks can be recapitalised and the eurozone member states can agree on a common fiscal policy in a calmer atmosphere."
"My seven-point plan to save the eurozone
George Soros
1) Member states of the eurozone agree on the need for a new treaty creating a common treasury in due course. They appeal to European Central Bank to co-operate with the European financial stability facility in dealing with the financial crisis in the interim â the ECB to provide liquidity; the EFSF to accept the solvency risks.
2) Accordingly, the EFSF takes over the Greek bonds held by the ECB and the International Monetary Fund. This will re-establish co-operation between the ECB and eurozone governments and allow a meaningful voluntary reduction in the Greek debt with EFSF participation.
3) The EFSF is then used to guarantee the banking system, not government bonds. Recapitalisation is postponed but it will still be on a national basis when it occurs. This is in accordance with the German position and more helpful to France than immediate recapitalisation.
4) In return for the guarantee big banks agree to take instructions from the ECB acting on behalf of governments. Those who refuse are denied access to the discount window of the ECB.
5) The ECB instructs banks to maintain credit lines and loan portfolios while installing inspectors to control risks banks take for their own account. This removes one of the main sources of the current credit crunch and reassures financial markets.
6) To deal with the other major problem â the inability of some governments to borrow at reasonable interest rates â the ECB lowers the discount rate, encourages these governments to issue treasury bills and encourages the banks to keep their liquidity in the form of these bills instead of deposits at the ECB. Any ECB purchases are sterilised by the ECB issuing its own bills. The solvency risk is guaranteed by the EFSF. The ECB stops open market purchases. All this enables countries such as Italy to borrow short-term at very low cost while the ECB is not lending to the governments and not printing money. The creditor countries can indirectly impose discipline on Italy by controlling how much Rome can borrow in this way.
7) Markets will be impressed by the fact that the authorities are united and have sufficient funds at their disposal. Soon Italy will be able to borrow in the market at reasonable rates. Banks can be recapitalised and the eurozone member states can agree on a common fiscal policy in a calmer atmosphere."
Quote from Dr Who:
Shorting retailers
I'm interested on big trades. I'm quite unlikely to make a big bet that is not long risk premium or at least some kind of neutral situation. This year after the Fed futures bet early in the year I haven't found anything other than long bunds(Which I missed)
I shorted a bit more of the EUR today but I'm not making a big bet there. Frankly because I just don't understand it fully. Everything is imploding there and the currency is going down slowly against the other european currencies
Quote from Debaser82:
So Greece's stockmarket down 85%...
Let's put all our money in a Greece ETF....
Might not be a bad idea at all. Big haircut to be announced soon and the runs seem to have started, panic bottom might come soon
Does anyone know the best buy to buy a basket of Greek stocks?
This could be a interesting way to hedge my EUR shorts(Thus enabling me to short some more). If the EU is saved, the stocks go to the moon. If its not, its hard for them to go down even more from here in a PERMANENT basis
Argentina Stock market
http://www.tradingeconomics.com/argentina/stock-market
The market bottomed a few months BEFORE the external default(Wikipedia says default was in early 2002, bottom was in late 2001). Just goes to show, if you wait for the right moment you lose a lot of the move. Market rose a lot after that
http://www.tradingeconomics.com/argentina/stock-market
The market bottomed a few months BEFORE the external default(Wikipedia says default was in early 2002, bottom was in late 2001). Just goes to show, if you wait for the right moment you lose a lot of the move. Market rose a lot after that
Is that in local ccy? What about "inflayshuns" during the same period?