Nervy investors are shunning Greek long term debt sending interest rates higher. Greece is the tail that wags the Euro dog. The currency remains under pressure after a brief respite after the announcement of the €30bn bailout.

Perhaps bond investors are questioning the efficacy of quelling a debt crisis with more debt.

"Greek bond yields hit new highs on Wednesday as a 20-member team from the European Union and the International Monetary Fund started negotiations on a rescue package for the country.

In a sign that markets are waiting for Athens to ask for assistance the yield on 10-year government bonds climbed 42 basis points to 8.28 per cent.

Contagion concerns moved to Portugal with yields on the country’s 10-year government debt surpassing February’s peak to hit 4.78 per cent up 17 basis points. Spreads on credit default swaps, a measure of the risks of default widened on both countries...."

Read more:

http://www.ft.com/cms/s/...-9977-00144feab49a.html

Hat-tip for the heads-up Scubidu. It is my understanding from the World Bank mandate that they are acting as Fund Managers and Advisors to the Central Bank of Kenya.

One of RAMP's stated objectives:

"Risk Management and Analytics: Develop a multi-faceted risk management function with robust quantitative and qualitative risk indicators encompassing market risks, credit risk and operational risk."

If so, why would they advice and oversee a purchase of U.S. Treasury Bonds by the CBK in the midst of a Sovereign Debt Crisis?

The term Black Friday refers to the Gold Panic of September 24th, 1869 when gold rose to $162.50 as a result of manipulation by Jay Gould and James Fisk. In a move that lasted 3 months, the two hoped to force the government to accept the higher price as it adopted a gold standard. The scheme fell apart on that fateful Friday as people who had deposited $20 in paper wanted $20 gold coins to sell on the New York Stock Exchange but the bankers handed the $20 notes instead. As a result, a run ensued on the banks with mobs dragging bankers out to the streets and hanging them. The government had to send in the army to quell the violence.

History loves re-runs.

" In late 2007, as the mortgage crisis gained momentum and many banks were suffering losses, Goldman Sachs executives traded e-mail messages saying that they were making "some serious money" betting against the housing markets.

The messages, released Saturday by the Senate Permanent Subcommittee on Investigations, appear to contradict previous statements by Goldman that left the impression that the firm lost money on mortgage-related investments...."

Read more:

http://www.sfgate.com/cg...D4EU0.DTL#ixzz0m5s5TB9F

Gold is the triple-A rated private store of value in times of uncertainty. Once gold surmounts $1165 on a closing basis and stays above that level for two trading days, it will have a good shot at hitting its previous high of $1224.

Mining equities, leverage to the metal, both up and down are set to benefit.

"(Reuters) - Gold mining shares are set to exceed gains from last year, fueled by a bullish outlook for gold prices and a pick-up in merger and acquisition activity, potentially giving the sector an edge over other miners.

Deals

Gold miners .XAU jumped almost 36 percent last year, outperforming a near 25-percent rise in gold prices in the same period as investors piled into safe-haven assets. The sector underperformed gains in the precious metal in 2008.

Analysts expect the sector to advance more sharply than gold in 2010. Year-to-date, the gold mining index is up 1.3 percent, against a 4.1-percent gain in the precious metal...."

Read more:

http://uk.reuters.com/ar...euDealsNews&rpc=401

A peek at the Currency Crisis of 1931 reveals that unlike today, Germany was on its knees financially due to war repatriations after World War I. It had to issue bonds in the United States to pay for its war debt; in essense utilizing debt to settle debt. The French, on the other hand, were in a strong position as a result of its substancial gold holdings and heavy commodity base.

France's opposition to the German-Austrian agreement led it to redeem German bills, severely crippling the latter's funding situation. That move by the French and its banks pushed Credit-Ansait Bank of Austria over the edge sparking bank failures across Europe.

Interestingly, Germany is engaging in the economic brinkmanship of the French several decades ago.

" April 26 (Bloomberg) -- Greek bonds tumbled, pushing yields to the highest since at least 1998, on concern Germany isn’t moving fast enough to agree to the terms of a 45 billion-euro ($60 billion) aid package.

Investors demanded an extra 6.35 percentage points in yield to buy the nation’s 10-year bonds rather than benchmark German bunds as Chancellor Angela Merkel said she won’t release rescue funds until Greece shows it’s got a “sustainable, credible” plan to cut its deficit. Citigroup Inc. said a reorganization of the debt or extra support for the nation looks “unavoidable.” Portugal’s bonds fell on concern the debt crisis is spreading...."

Read more:

http://www.businessweek....on-bailout-concern.html