« Un effacement de dette semble inévitable en Europe »

Les Echos

Steven Major, responsable mondial de la recherche sur les taux chez HSBC, estime que la mutualisation des dettes dans la zone euro pourrait représenter jusqu’à 2.000 milliards d’ici à 2014. A terme, le Mécanisme de stabilité pourra devenir l’émetteur commun.

A travers l’action de la Banque centrale européenne (BCE) et des fonds de secours européens, le processus de mutualisation de la dette dans la zone euro a déjà démarré. Selon Steven Major, responsable mondial de la recherche sur les taux chez HSBC, cette dette « commune » devrait atteindre pas moins de 1.000 milliards d’euros d’ici à un an, soit le double d’aujourd’hui. D’ici à 2014, le montant avoisinera sans doute de 1.400 à 2.000 milliards, en tenant compte du stock d’emprunts obligataires achetés par la BCE et des prêts octroyés aux pays fragiles de la zone euro par les fonds de secours, dont le Mécanisme européen de stabilité (MES), qui entrera bientôt en fonction.

Number Five

John Hussman

Examine the points in history that the Shiller P/E has been above 18, the S&P 500 has been within 2% of a 4-year high, 60% above a 4-year low, and more than 8% above its 52-week average, advisory bulls have exceeded 45%, with bears less than 27%, and the 10-year Treasury yield has been above its level of 20-weeks prior. While there are numerous similar ways to define an “overvalued, overbought, overbullish, rising-yields” syndrome, there are five small clusters of this one in the post-war record: November-December 1972, July-August 1987, a cluster between late-1999 and early 2000, early 2007, and today.

Mario Draghi et ses deux jambes

Les Echos

La Banque centrale européenne tient ses promesses. Comme son président Mario Draghi l’avait annoncé en juillet, elle est prête à acheter des obligations d’Etats en péril financier. Hier, Draghi a précisé les modalités de ces interventions en enrichissant le lexique de la politique monétaire d’un nouveau terme : opérations monétaires sur titre ou OMT (« outright monetary transactions », en version originale).

Le Japon dans une impasse politique et budgétaire

Les Echos

Le rebond de croissance est menacé. Les géants de l’industrie, notamment électronique, connaissent une crise historique. Le yen bat des records. La dette atteint un niveau jamais expérimenté par aucun pays développé. Mais, depuis hier soir, le gouvernement japonais ne peut plus répondre à aucune des angoisses qui frappent l’Archipel. Il est paralysé. Les partis d’opposition, qui contrôlent la chambre haute du Parlement, ont réussi à faire voter une motion de censure contre le Premier ministre, Yoshihiko Noda.

Confidence and Enthusiasm

John P. Hussman, Ph.D.

http://www.hussman.net/wmc/wmc120820.htm

The present confidence and enthusiasm of investors about the ability of monetary policy to avoid all negative outcomes mirrors the confidence and enthusiasm that investors had in 2000 about the permanence of technology-driven productivity, and in 2007 about the durability of housing gains and leverage-driven prosperity. Market history is littered with unfounded faith in new economic eras, and hopes that “this time is different.” Those periods can be difficult, at least for a while, for investors who are less willing to abandon evidence and lessons of history, not to mention basic principles of economics and valuation. We endured similar discomfort in periods like 2000 and 2007, before hard reality set in.

Risk Builds as Junk Bonds Boom

New York Times

Money market funds pay next to nothing. Interest rates on United States Treasuries are dismal. The volatile stock market has been dead money for more than a decade. The market for junk bonds, risky corporate debt that pays high interest rates, is red hot. Such debt, also known as high-yield bonds, has returned 10.2 percent year-to-date, according to a JPMorgan high-yield index. Junk bond funds are on a pace to take in a record amount of money this year. Companies with less than stellar credit are issuing hundreds of billions of dollars of bonds.

France-Allemagne, deux visions de l’euro

Les Echos

La question des euro-obligations n’est pas un sujet technique, mais un sujet historique et stratégique. L’opposition sur les questions monétaires entre la France et l’Allemagne est historique. Dès les années 1970, ces deux pays se sont affrontés sur la façon d’avancer vers l’intégration monétaire. A la suite de l’effondrement du système de Bretton Woods en mars 1973, les Européens ont accéléré leurs réflexions en faveur de la réduction des fluctuations entre les monnaies des pays membres initiées lors de l’accord de Bâle d’avril 1972.

Le gourou des restructurations de dette livre ses pistes pour surmonter la crise de la zone euro

Les Echos

Lee Buchheit, le grand spécialiste des restructurations de dettes souveraines qui a dirigé les opérations en Grèce, livre aux « Echos » son analyse.

 

C’est l’homme des situations difficiles. Mexique (1982, 1985), Russie (1996, 1999), Uruguay (2003), Irak (2004), Equateur (1993,2008), Islande (2010)… Le nom de Lee Buchheit est associé aux plus grandes faillites souveraines des trente dernières années.

Run of the Mill

John P. Hussman, Ph.D.

http://www.hussmanfunds.com/wmc/wmc120604.htm

Since late-February, our estimates of the market’s prospective return/risk tradeoff (over a set of horizons from 2 weeks to 18 months) have persistently held in the worst 0.5% of all historical observations. It’s always important to emphasize that we try to align ourselves with the average return/risk profile that has historically accompanied the particular set of investment conditions we observe at each point in time, but that the outcome in any specific instance may not reflect the average return, and may even fall outside of what we view as the likely range of outcomes. That said, the awful behavior of the market in recent weeks is very run-of-the-mill in terms of how similarly unfavorable conditions have usually been resolved historically, and there is no evidence that this awful prospective course has changed much. The chart I included three weeks ago in Dancing at the Edge of a Cliff presents similar periods for historical perspective.

« La dette française ne sera jamais attaquée comme celle de l’Espagne ou de l’Italie »

Les Echos

ALASTAIR NEWTON ANALYSTE POLITIQUE SENIOR CHEZ NOMURA

Le marché est-il plus favorable à un candidat à la présidence française ?

Investors hunt strategies in era of ‘repression’

Financial Times

It may be little more than a buzz phrase in the markets but a growing number of strategists believe it accurately encapsulates how sovereign debt markets are being distorted by central bank and government policies that keep interest rates at historic lows.

Chart: Click to enlarge

Real bond yields, those adjusted for inflation, are at their lowest since the 1970s in the US and UK. And if the effect of central bank action is to prevent market mechanisms from responding to inflation, an element of the repression, then this poses big questions for investors’ asset allocation strategies.

Treasurys Break Ties With Stocks

Wall Street Journal

NEW YORK—Fears about Europe’s debt crisis and the U.S. economy appear to be easing, but the flight into safe-harbor Treasurys hasn’t reversed as sharply as might be expected given the rally in stocks. That is because of the U.S. Federal Reserve’s heavy hand in the market, analysts say, which is seen keeping a lid on Treasury yields even if conditions in Europe and the U.S. improve.

Prices of stocks and Treasurys usually go in opposite directions, because interest in riskier assets such as shares often comes at the expense of safe, but low-yielding, Treasurys. In recent weeks, however, the stabilizing landscapes in the euro zone and the U.S. have revealed diverging viewpoints from the stock and bond markets. "The Federal Reserve has been very, very vocal about the length of keeping rates lows," said Ray Remy, head of fixed-income trading at Daiwa Capital Markets America. "That in effect takes away your inverse relationship, and it can last for a while."

Investors play it cautious

Financial Times

This must be one of the least enthusiastic market rallies in history. Shares are up about 20 per cent globally since they really took off in late November, yet buyers seem to be sitting on their hands. Volumes of US shares traded during this rally have been at their lowest, on a 30-day moving average, since the depths of the Great Recession in January 2009. Investors are not buying back into mutual funds focused on developed market shares, either – although emerging markets have proved appealing this year.

How deep are the ECB’s pockets?

FT alphaville

The ECB’s exposure to peripheral sovereign debt and a host of other assets of dubious quality has sparked concerns about the central bank’s solvency. The concerns are misplaced. Central banks cannot go bust. The vast majority of the ECB’s obligations are denominated in euros and so, in the case of losses, the central bank can simply print more money.

But money printing on a grand scale could spark inflation. And, while the ECB and the eurosystem central banks have a capital buffer of €80bn, this is relatively small when held up against the size of the eurosystem’s balance sheet, which stands at a whopping €2.7tr — even before tomorrow’s offer of three-year loans is taken into account.

« L’Europe n’a pas encore fait tout ce qu’elle pouvait contre la crise »

Les Echos

En offrant aux établissements financiers de la zone euro des prêts sur trois ans à taux faible, la Banque centrale européenne (BCE) fait disparaître le risque de liquidité, explique Jim Leaviss, chez M & G. «  L’époque Trichet-Weber-Starck est révolue, nous avons maintenant une BCE très différente de celle qui avait relevé ses taux d’intérêt en pleine crise », affirme le spécialiste, convaincu que le marché en a pris pleinement conscience. « La Banque centrale européenne réalise enfin ce que Ben Bernanke avait compris avant : il y a un risque de nouvelle grande dépression. »