Investment Markets Overview – w/e 7 Sept 2012

The European debt crisis took a further twist this week, as the ECB President, Mario Draghi, announced a plan to purchase unlimited sovereign bonds of one to three years, sterilised and conditional, being the key words. Sterilisation is a policy tool whereby central bank intervention is theoretically offset by commensurate reductions in other activities, whereas it will be conditional on Euro-Zone countries that apply for the programme will have to agree strict debt reduction policies, to be known as the ECCL, or enhanced conditions credit line, or in plain English, austerity measures. The current bail out pots, the EFSF and the ESM, through which $390BN of “loans” have already been awarded to Greece, Ireland, Portugal and Spain, saw the ECB escape any loss from default, as it placed itself above private creditors. This time around it has agreed to be treated the same if a bond restructuring is necessary. Whilst the revised plans will ease liquidity pressures, it is no cure for insolvency and it remains unclear just how the ECB can enforce austerity on governments, let alone convince the Germans and the Dutch to backstop unlimited liabilities.

Subscribe to the Full Investment Markets Overview Newsletter which contains the following additional content:-      

  • In a holiday shortened week, US economic statistics were upbeat, including . . . .

  • Euro-Zone data included the PMI forecasts for August . . . .

  • The UK PMI numbers for August were, in the main, better than forecast  . . .

  • Out East, Japan’s vehicle sales in August   . . .

  • The $US index fell by . . . 

  • The commodities complex soared on the poor US jobs data, . . .

  • Economic data due next week includes . . .

  • Bill Clinton this week became the first . . .
     

  • Charts:-
    1. Indices Weekly
    2. 1Mth Change in payroll employment by industry . . .
    3. AEX vs GDP
    4. China PMI Manufacturing vs China GDP
    5. Deflation Results so far . . . 1st Decline since the 1930’s

Table of 15 Indices, 11 columns of detailed information, for accurate analysis

“If you think education is expensive, try ignorance”

Due to holiday commitments there will be no weekly overview next week
but will return for the week ending
21st September.

Click  HERE  to view Details of the full version of this Newsletter

which includes full text and detailed Charts for each section

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