Since Soros is purchases EU debt does that give others (hedge funds, gov't, etc.) some comfort to do the same? And if it does, does that put a floor on the market at least in the short run? Keeping Spains, Italy's, Greece bonds under control...
I wouldn't believe that Soros views this as anything but a hedge or a short term trade/hedge. The biggest problem that I see with the new EU treaty is that it doesn't get at the root of the problem within the Euro Zone economies and that is a lack of growth. The new EU treaty is a sanctions and fiscal discipline treaty. What it is not is a stimulus plan.
I do think the treaty will help stabalize the debt market in the short term, but you saw what happened to Greece after it recieved its first bailout package in 2010 which was lined with sanctions and austerity measures.
The treaty has been in works for months I believe. Participants or hopefully participants would have had to implement austerity measures just to be accepted, once they had done so, it is no wonder the treaty is now breaking into the day light. Austerity can't help this countries grow and neither is the new treaty. It is nothing more than a band aid for governments and banks. The economies and the average citizen of these nations are the ones who suffer first, then the governments fall.
Most of the fiscal disciplines and measures are being assumed by the EU based on certain gdp numbers, much like Greece's bail out package came with fiscal disciplines that seemed manageable at the time, but proved falty in less than a year as its economy sank further and further into recession.
When the Euro Zone countries cotract further, the bond markets will once again become skiddish and rates will again rise to unsustainable levels. Just my humble thoughts on the matter.
thanks, you thoughts make sense...I was just thinking in the short run (next 3 months) that maybe this would put a floor on the fear of these bonds. Thus, this would give the markets a floor and maybe some more room to move upwards into the S & P 1350 area. Which in turn should allow SODA to move up easier and reach 50 -65 before earnings.