Many analysts had opinions before the bailout, but no one was talking about the most important indicator
April 26, 2012
By Elliott Wave International
Make no mistake: The stakes for financial and economic survival in Europe are high. Seemingly everyone — from investment bloggers to financial television hosts — has something to say about the European debt crisis.

But with so many divergent opinions to choose from, which ones should you trust?

That’s where Elliott Wave International’s global-market analysis team comes in. Our analysts cut through the noise of endless talking heads with an independent perspective. By focusing on objective Elliott waves and other technical indicators, they equip you to stay one step ahead of Europe’s financial turmoil.

Case in point: Just over one year ago in late March 2011, mainstream …

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.

Mohamed El-Erian, chief executive officer of PIMCO, talks on Bloomberg about Europe’s financial crisis and the banking industry.

Source: Bloomberg, January 12, 2011.

From the same firm, Bill Gross, manager of the world’s largest bond fund, discusses the debt sold on Wednesday at auction by Portugal. Gross also talks about the municipal bond market, Federal Reserve policy and investment strategy.

Source: Blomberg (via YouTube.com), January 12, 2011.

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[Introduction below, and then continuing from Part 3.]

In 14 editions of the Amphora Report this year we have covered nearly 30 topics, many of which overlap in some way. What binds them all into a coherent set is our view that the economic policies being implemented in nearly all major countries are not just unsustainable but in some cases outright reckless. These countries include the US, the issuer of the world’s reserve currency. By implication, the dollar is likely to lose its pre-eminent reserve currency status in the coming years. The result is bound to be a period of global economic and financial market turmoil and, for most if not all traditional financial assets, underperformance in real, purchasing-power adjusted terms. What follows below is a list of all topics, including

...

[Introduction below, and then continuing from Part 2.]

In 14 editions of the Amphora Report this year we have covered nearly 30 topics, many of which overlap in some way. What binds them all into a coherent set is our view that the economic policies being implemented in nearly all major countries are not just unsustainable but in some cases outright reckless. These countries include the US, the issuer of the world’s reserve currency. By implication, the dollar is likely to lose its pre-eminent reserve currency status in the coming years. The result is bound to be a period of global economic and financial market turmoil and, for most if not all traditional financial assets, underperformance in real, purchasing-power adjusted terms. What follows below is a list of all topics, including both a brief summary and an update of our

...

[Introduction below, and then continuing from Part 1.]

In 14 editions of the Amphora Report this year we have covered nearly 30 topics, many of which overlap in some way. What binds them all into a coherent set is our view that the economic policies being implemented in nearly all major countries are not just unsustainable but in some cases outright reckless. These countries include the US, the issuer of the world’s reserve currency. By implication, the dollar is likely to lose its pre-eminent reserve currency status in the coming years. The result is bound to be a period of global economic and financial market turmoil and, for most if not all traditional financial assets, underperformance in real, purchasing-power adjusted terms. What follows below is a list of all topics, including both a brief summary and an update of our thinking for 2011.

HOW WOULD EINSTEIN VALUE FINANCIAL ASSETS? VOL 1/5

With this

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In 14 editions of the Amphora Report this year we have covered nearly 30 topics, many of which overlap in some way. What binds them all into a coherent set is our view that the economic policies being implemented in nearly all major countries are not just unsustainable but in some cases outright reckless. These countries include the US, the issuer of the world’s reserve currency. By implication, the dollar is likely to lose its pre-eminent reserve currency status in the coming years. The result is bound to be a period of global economic and financial market turmoil and, for most if not all traditional financial assets, underperformance in real, purchasing-power adjusted terms. What follows below is a list of all topics, including both a brief summary and an update of our thinking for 2011.

FROM “DARTH” TO “CZAR” VOLCKER? VOL 1/1

Imagine that, as in 1979, Paul Volcker is tasked with

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With apologies to John Paul Young ...

Bailout in the air

Everywhere I look around

Bailout in the air

Every sight and every sound

 

And I don't know if it's just the Irish

Don't know if we can afford it

But it's something that I must believe in

And it's there when I look in your eyes

 

Bailout in the air

And the Euro's going up

Bailout in the air

In the Union that we got

 

And I don't know if Porto is next

Don't know if Proell will pay

But it's something that I must believe in

And we hope that they do what they say

 

Bailout in the air

Bailout in the air

oh, oh, oh...

 

Bailout in the air

In the

...

The Eurozone seems to be the place where the party never ends these days as one skeleton after the other comes rattling out of the closet. Indeed, one has the impression that history is in the making these days and the only thing we can hope is that it will be for the better.

In truth however, I felt a good measure of sympathy for Ireland today as I read the Bloomberg report about how the country is now essentially on its way to accepting a deal that will have aid delivered from the EU, the IMF and, most painfully, from England.

Irish rebels fought for independence during World War I, boasting they served “neither King nor Kaiser.” Ireland may now have to do exactly that to qualify for a bailout partly funded by both Britain and Germany.  Prime Minister Brian Cowen is edging

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The cost to insure Irish bonds against a government default jumped to a record yesterday (Tuesday) after Standard & Poor's said the cost of bailing out nationalized lender Anglo Irish Bank Corp. could exceed $47 billion. Contracts on credit default swaps (CDS) on Anglo Irish bonds rose 1.5 basis points to 937.5, implying a 56% probability of default within five years, after earlier climbing to an all-time high of 960.5. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. Increasing prices signal deteriorating credit quality. ...

Portugal only managed to sell EUR 750 million in bonds at yesterdays auction – at the bottom of its indicative range – and, like Ireland, was forced to pay much higher yields than its previous auctions. Today The Irish CDS spread exceeded 500bp for the first time in recorded history. “It is becoming clear that Ireland and Portugal are perceived by investors as the most vulnerable to a Greece-style collapse in confidence.”