Looks like it’s time to put the Euro out of its misery:
Leaders of the 16 eurozone nations have agreed to fund up to 30bn euros (£26bn) in emergency loans for debt-hit Greece, if the country wants the cash.
The price of the loans will be fixed using IMF formulas, and be about 5%.
The rate is what gives it away. Given what recent bids for Greek 1yr bonds have been (not 10 – 1), it makes Luxembourg Prime Minister Juncker’s statement a bald-faced lie:
Luxembourg Prime Minister Jean-Claude Juncker, speaking for eurozone finance ministers, said there were no elements of subsidy in the loan proposal.
There’s a subsidy in the rate. I don’t think he’s so naive to not see this, but who does he think he’s fooling? Based on the spread between the last quote in the chart and what this article says, that’s a 234bp concession:
And the chart for 3yr Greek govies is below. That rate is a 198bp concession:
So it should be obvious these are better rates than the Greeks can raise on their own. Plus, given that the curve is inverted between 1yr and 3 yrs, and spreads to German Bunds being stratospheric, but not quite moonbeam levels, German PM Angela Merkel has to be furious. Because all this does is push this crisis from being one pertaining to sovereign credit for one country to another that involves a currency unit involving an entire continent.
And the Euro keeps making lower highs on the daily chart, with the channel still very much in tact going back to December:
The daily closes over the past month have stayed closer to the top of the channel than the lower, and it may give one a sense of hope that this will start to turn the action around.
So in the meantime, I’m getting this baby ready for to take out for target practice.
I imagine finding Euros laying on the ground in Amsterdam, Bonn, and other European cities won’t be hard to find now. Perhaps I’ll make a target silhouette out of them…