Risk update 18/11/2010

• Euro zone members begin the bail out Ireland's banking sector (i.e Ireland) with the IMF, markets are worried about delays with Dublin still undecided whether to request the aid. Irish bonds @ 30% is a reflection of that nervousness.

• Spain and Portugal: are also making investors nervous after data showed Spain’s economy stagnated in the third quarter and after yields spiked at a treasury bill auction in Lisbon. So if the EU/IMF and Ireland hobble a bailout package together, Spain and Portugal will line up next.
  

• Beijing: That is making global investors jittery as it could cool demand in the world’s fastest growing major economy at a time of failing recovery in Europe and the United States.

• The Fed’s USD600bn quantitative easing programme re: Republican lawmakers wrote a letter of protest to Ben Bernanke. The letter said the bond-buying campaign will debase the dollar, spawn inflation and generate asset price bubbles.

• US Treasury prices falling as rising political pressure, both at home and abroad, re: Fed to back off from the plan has caused Treasury yields to rise and lifted the dollar to multi-week highs.

• Financials were sold after the Federal Reserve said it will evaluate the ability of 19 large financial institutions to withstand losses in "adverse" economic scenarios. Which would mean that a liquidity/credit crunch could be on the way if Eueope goes into a bailout confusion direction add the Foreclosure mess in the US