Chillin' out till it needs to be funded
The Ministry of Magic is greatly filling up time for the Europeans before they singn on the dotted line for a ESM/ECB/New Bank bailout of the nationa nd its cajas as the Minsitry of the Economy in Madrid lines up all retail bondholders for a round haircut on over EUR 30 B of mortgage bonds that have since gone underwater, before returning the rsto f the money to them. While everywhere else hedge funds and IIF led bank investors had argued and got a six month period to argue amd agree to new Greek Government bonds, the bondholders in this case are banks depositors who were approached byt he Cajas to buy their mortgage debt and now the Ministry of Magic has no funds to return them the money so there will be a shorter round of haircuts for these bondholders or none if the government bites the bullet for a more comprehensive bailout after the bank audits are over in the next few days
Asia celebrated National Day in the erstwhile Commonwealth including us in India and markets were closed while the Euro fell below 1.23 and the US futures opened near 1400 for the S&P 500 tipped to hit 1500 before December as the US finds its rhythm again in retail sales and a subdued inflation reported today. European markets finally let g of their winning streak as there just is not enough confidence to go around and even the East coast Empire State index reported Contraction in July
International investors refused to take the bait in July and Us investors responded in kind shunning international securities too as the Q2 data affected buying of US Assets by FOreigners in July and stressed the lower yet sizable $47 B trade deficit for BOP with $55 B buying in June dropping to under $10 B in July 2012.