Eurozone bailout fund falls short of €1 trillion target

[alp227]

Source: The Guardian

Europe's hopes of ringfencing the embattled single currency through a €1 trillion-plus leveraged bailout fund are sinking due to spiralling bond yields, investor flight from eurozone debt, and failure to entice cash-rich governments in the far east to commit to the plan.

Klaus Regling, the head of the European Financial Stability Facility (EFSF), is expected to tell eurozone finance ministers meeting in Brussels on Tuesday evening that the scheme to quintuple the firepower of the fund by underwriting initial losses on eurozone bond-buying by China and sovereign wealth funds in the far and Middle East has failed to attract enough interest.

The blow to eurozone efforts to save the currency came amid increasingly apocalyptic predictions of a euro collapse. The Organisation for Economic Co-operation and Development in Paris forecast a "deep depression" across Europe and a tidal wave of bankruptcies if any of the 17 countries was forced to quit the euro. The Polish foreign minister, Radoslaw Sikorski, urged Germany to save the EU from "a crisis of apocalyptic proportions".

The Moody's ratings agency predicted that a euro exit by any country would trigger a cascade of sovereign defaults across the eurozone. Jean Pisani-Ferry, director of the influential Bruegel thinktank in Brussels, said that "real businesses" as well as the financial markets were now "pricing in a break-up scenario … If disaster expectations build up and a growing number of players start positioning themselves to protect themselves from it, the consequences could become overwhelming."

Read more: http://www.guardian.co.uk/business/2011/nov/28/eurozone-bailout-fund-falls-short-target

[aquart]

1. Investor flight?

And again I ask, does anyone know where the flight capital is going? This argues a massive migration of investment money. Who is getting it?

[Lucky Luciano]

2. Have you noticed how low US Treasury yields are? nt

[aquart]

4. I notice nothing. That's why I have to ask.

Now that you mention it, it's obvious. Before that, oblivious mind made no connection.

Thank you.

Could we wipe out our deficit with them?

[bossy22]

3. the U.S. Govt Bond market

people are willing to lend the federal government money for 10 years at under inflation yields.

also UK bonds and japanese bonds as well....notice a pattern? Capital is going into governments bonds of countries who print their own currency and denominate their debt in their own currency

[aquart]

5. They're putting money in Japan?

Seriously?

[Spider Jerusalem]

6. ...

TOKYO, Nov 28 (Reuters) - Japanese government bonds fell on Monday as a rise in yields on euro-zone debt pressures investors to take profits from JGBs and prepare for expected losses in risk assets.

http://www.reuters.com/article/2011/11/28/markets-japan-jgb-idUSL4E7MS1EE20111128