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What is EFSF

What is EFSF?

The European Financial Stability Facility (EFSF) was created by the euro area Member States following the decisions taken on 9 May 2010.

The EFSF’s mandate is to safeguard financial stability in Europe by providing financial assistance to euro area Member States.

In short, it is the fireman of the Euro Debt Crises. But now the question, EFSF doesnt have enough “water” to put off the “fire” (PIIGS debt).

Gold would certainly go to 2000

I own gold. I have not sold any gold. I bought some more a week or two ago when it was down. When gold goes down, I try to act and buy more. If it goes down a lot, I would hope I would buy a lot more. Gold would certainly go to 2000. I do not know when it is going to go to 2000, but I know it certainly would very soon.

You’ll Never Guess Who Bought Bonds At Last Week’s Disappointing EFSF AuctionLast week, the European Financial Stability Fund sold 3 b ($4.1 b) of bonds in what was widely considered to be a disappointing auction.
However, according to The Sunday Telegraph, the auction can now but ruled as a complete failure.
According to auction result report, the EFSF had to step in to buy EFSF bonds due to tepid demand.

From their report:
Sources said the EFSF had spent more than 100m buying up its own bonds to help it achieve its funding target after the banks leading the deal were only able to find about 2.7b of outside demand for the debt.

Global Investors Blog

Imagine you want to borrow money from the “big ear hole”, you want a lower interest. Thus, you took the old borrowed money to pretend another “big ear hole” to lend money to yourself. It aims to show other real “big ear hole” that someone is willing lend you a lower rate. Is it ridiculous? It is a kind of cheating!

Translation from Google:
想像一下,你想借用“大耳洞”的錢,你想要一個低利率。因此,你把舊借來的錢,假裝另一個“大耳窿”借錢給自己。它的目的是顯示其他真正的“大耳洞”,有人願意借錢給你較低的利率。可笑嗎?它是一種作弊!

In the night before thanksgiving 2011. Amgen decided to drop a bomb on the biosimilar companies – We extent the patent for 17 years.

Most of the biosimilar companies already have put a lot of money into this drug, and I hope they will have a back up plan. I think most of them will take the approach of pull the trigger first, and the question later. Alternatively,  they freeze down their cell line, and just wait till 2028.

The IN VIVO Blog: Hopes Dashed For Biosimilar Enbrel?

The IN VIVO Blog: Hopes Dashed For Biosimilar Enbrel?.

Again, number is out. ROI R&D = 12%.

DOW this year ROI =0%

I know all the pharma are laying off R&D. And I don’t blame them, you will want any of your investment at 20%. R&D is probably the most in efficient group in the organization.  2 Way to get better, R&D staff need better business sense, and need to be lean.

The market is so overextended now. Even though it is a up trend, I am not going to enter a lot of position into the long.

Here are couple stock pick for this week.  Check out the STO. I just feel like we need some strong consolidation days to make the market healthy.

Symbols from TC2000
NTCT
SCSS
CBG
SZYM
NUAN
BWLD

A lot of media mentioned that France/Italy/Spain are “Too big to fall/save”. But actually, how big it is?

It is the GDP ranking statistics provided by the IMF at 2010. In fact, the GDP size of France/Italy/Spain is nearly 60% of the entire Euro Zone.

If France/Italy/Spain adapts a very strict of austerity policy and repay the sovereign debt instead of maintain the consumption. The demand of Euro Zone will drop rapidly which will be a disaster for the Euro Stock market. If France/Italy cannot adapts the austerity plan. There will be a disaster too as there will be sovereign debt crises.

Indeed, the EURO banks are selling asset proactively as they are forced to increase 9% reserve ratio before June 2012. It will be very hard to borrow money in Europe in coming two years as Euro banks will become “Vampire” banks. (Vampire banks happened in Jap in the past 20 years, all the Japan banks behaved like a vampire as they would rather keep the cash instead of lending. It is because they dont trust any borrower beside the central bank.) They will not lend money to the SME (they have no confidence for the economy) but only purchase the bond from ECB. (Credit/FX Risk Free)

Yes, I agree completely. FIS Cannot just stop spending money. But they can redirect their spending to area that can create jobs and innovation for the country. Like invest in technology, infrastructure, education etc. Then, slowly cut program like long term unemployment benefit that encourage people to be lazy.

No one know if Italy can pay it debt back. If you look at the number, they are owning 130% of their annual income. So, it is possible that they can pay the debt, but it is need some changes.

Here is an example, Mario makes $100,000K a year. And he bought a 130K house. That is totally ok with 10 -20 year mortgage, and he should have no problem to repay this debt. Well, problem is Mario have horrible spending habbit. He keep buying jewlery to princess toadstood, and keep taking her on trip. Well, now he don’t have money to pay the mortgage.
What should he do?
1. Print money – he cannot do that because (unlike US) they don’t have control of their printing press.
2. Default – No one will allow them to do that because it will screw everyone.
3. Loan modification – Hair cut, whatever they need to do to buy sometime.

Whatever they choose to do. Mario need to dumb Princess Toadstood, and save his money for his debt.

Romeny is getting kill for his issue shifting .

 

When I study my MBA, a newest strategy I learn is improv, meaning you react to the situation when new thing come up through practice. I really don’t understand why he is getting kill for it. When there is new information, you change your strategy according to it.

Obama didn’t do that. He try to push through the healthcare program while the economy is bad. Bad decision. A decision based on vote, not the right things to do.

Clinton let Hilary propose the healthcare, then get killed. A smart way to say I try, but failed.

So, I hope people will understand who will be best to help the county to be competitive.

 

I have post tons of articles from my friend Terry. Now I look at EUO he recommend, and yes, EUO is now buyable, it just go pull back to 20 EMA on the weekly chart. Target @ $20, Stop @ $17.