Moreover, not forbidding indirect purchases should be seen primarily as a means of permitting banks that buy government bonds to pledge them as collateral for refinancing operations, while bearing the full investment risk. The distinction between bond purchases from the government and from the banks that bought them from the government is a phony one that gives rise to myriad possibilities for circumvention.

The ECB has already attempted to ease credit conditions by purchasing high quality asset backed securities. It has bought securities backed by cash flows from private sector mortgages, so called covered bonds, and it has floated the idea of buying corporate bonds and multilateral securities issued by the European Investment Bank.

Investors tendered 91.2 per cent of the 500 million in bonds due in 2006 and 95.7 per cent of the 600 million in bonds due in 2013.

Debt buy back and Brady bonds11

Before January, this sequence of events was quite likely, but the ECB s bond buying program put a firebreak at each point of the contagion process. If holders of Portuguese bonds are alarmed by a future Greek default, the ECB will simply increase its bond buying with no limit to its buying power, it will easily overwhelm any selling pressure.

Sierra Leone would issue iron ore bonds and Mongolia would issue copper bonds. Investors would be able to buy Guatemala s coffee bonds, Côte d Ivoire s cocoa bonds, Liberia s rubber bonds, Mali s cotton bonds, and Ghana s gold bonds.

Jamaica, for example, would issue aluminum bonds Nigeria would issue oil bonds Sierra Leone would issue iron ore bonds and Mongolia would issue copper bonds. Investors would be able to buy Guatemala s coffee bonds, Côte d Ivoire s cocoa bonds, Liberia s rubber bonds, Mali s cotton bonds, and Ghana s gold bonds.

I want you to buy me a government bond.

In addition, the ECB could purchase EIB bonds on secondary markets, which would help to keep funding costs low or even reduce them. More important, purchases of EIB bonds would enable the ECB to undertake quantitative easing without triggering the degree of controversy implied by intervening in 18 separate sovereign bond markets, where concerns that ECB purchases would affect the relative pricing of sovereigns are very real.

And cashing in a bond to pay for a ring.

He is the main buyer of U.S. Treasury bonds.

BRUSSELS It has now been nearly half a year since the European Central Bank declared its intention to buy some 1.1 trillion ( 1.3 trillion) worth of eurozone bonds. When it first announced the so called extended asset purchase program in January, the ECB emphasized that it was only expanding an existing program, under which it had been buying modest quantities of private sector bonds, to cover government paper.

I want you to buy me that bond.

But QE would present a problem for the ECB that the Fed and other central banks do not face. The eurozone has no centrally issued and traded Eurobond that the central bank could buy.

Adding 400 billion would increase the pool substantially. Together with asset backed securities, covered bonds, and corporate bonds, 1 trillion of assets the threshold widely thought to make quantitative easing by the ECB credible would be available for purchase.

(ii) Investments include securities acquired by the Organization to produce income.

(2) expenses on purchasing commercial insurances, securities, stock equities or collections and so on

Pushing up asset prices and pushing down the euro s exchange rate will require the ECB to buy bonds on the secondary market not the crisis countries bonds per se, but those of all eurozone members. In other words, it will require quantitative easing.

Proponents of OMT counter that the Treaty forbids only direct government bond purchases indirect purchases in secondary markets are allowed. But the decision not to prohibit indirect purchases, opponents argue, may have been intended to allow the ECB to carry out weekly repo operations, following a practice used by the Banque de France to reduce fluctuations in short term interest rates.

The similarity between the SMSF and OMTs also implies that at least one of the two institutions is exceeding its mandate. If government bond purchases are monetary operations, as the ECB claims, the ESM is overreaching if they are fiscal operations, it is the ECB that has crossed the line.

Expresses its appreciation for the donation made by the Kingdom of Saudi Arabia, announced at the Donors Conference (Paris 2) of the amount of US 700 million in the form of securities and of purchasing government bonds.

The bonds can be sold to a worldwide market by insurance companies that incur major risks by writing policies. If the insurance companies can get a good enough price for such bonds, they can eliminate their exposure to the risk of a major disaster, thereby allowing them to issue policies to homeowners at a lower cost.

Assuming a limit to foreign investors willingness to buy these bonds, Greeks would have to buy them. In an economy unequipped for growth, household wealth relative to wages would soar, and the labor supply would shrink, causing employment to contract.

The seller receives the housing bonds and can use them for his next property purchase, keep them as savings or sell them on the market.

So far, policymakers are talking only about exchanging old Greek bonds for cash (in buybacks) or new Greek bonds. It would be far preferable to exchange them for Eurobonds, backed by the full faith and credit of all eurozone countries.

The ECB has promised to buy Italian and Spanish sovereign bonds to keep their interest rates down, provided these countries ask for lines of credit from the European Stability Mechanism and adhere to agreed fiscal reforms. Germany s Constitutional Court has approved the country s participation in the ESM, and Chancellor Angela Merkel has given her blessing to the ECB s bond buying plan, despite strong public objections from the Bundesbank.

During the first seven months of 2010, China not only refrained from buying any more US government paper, but even began to sell its holdings. Each month, China sold a net sum of about 7 billion in US government bonds.

The application of funds of an insurance company is limited to bank deposits, trading of government and financial bonds and other forms of fund application stipulated by the State Council.

Under the OMT program, the ECB can replace foreign outflows from sovereign bond markets through direct purchases, putting Spain on par with non eurozone countries like the United Kingdom. And, to the extent that there is even an informal price target associated with the ECB s commitment to purchase bonds, foreign outflows, at least from the sovereign bond market, are automatically replaced, in full, with ECB cash.

For all these reasons, purchasing private sector securities alone will not enable the ECB to achieve its stated goal of expanding its balance sheet by 1 trillion ( 1.2 trillion). Unable to vanquish the specter of deflation, ECB President Mario Draghi will need to continue working to build a consensus even better, unanimity within the bank s governing board for purchases of government bonds.

The City of London has jumped into the breach, increasing its purchases, which in 2008 and 2009 amounted to only about 1 billion monthly, to an average of 28 billion in the first seven months of this year. Since the United Kingdom itself is a large capital importer, we can assume that the City is not holding the paper itself but merely restructuring it and then selling it to the world under a new name and with the London stamp on it.

Now, the CDS market offers a convenient way of shorting bonds, but the risk reward asymmetry works in the opposite way. Shorting bonds by purchasing a CDS contract carries limited risk but almost unlimited profit potential, whereas selling a CDS contract offers limited profits but practically unlimited risks.

Once the first two elements of the plan are in place, there should be little need for the third bond purchases by the ECB in the secondary market in order to narrow interest rate spreads and provide further confidence. Indeed, if the ECB intends to claim preferred creditor status for any bonds that it buys, it is probably best that it buy very few.

In response, central banks should purchase government bonds for cash in as large a quantity as needed to push their prices up as high as possible. Expensive government bonds will shift demand to mortgage or corporate bonds, pushing up their prices.

1 Illegally buying securities issued by shareholder of the securities firm or other issuer with major relationship to securities firm against regulation

Investors are buying long term bonds at the current low interest rates because the interest rate on short term investments is now close to zero. In other words, buyers are getting an additional 2 current yield in exchange for assuming the risk of holding long term bonds.

Bond holders are to receive 456 million in bonds due in 2011 (with the same coupon of 9.5 per cent) and 574 million in bonds due in 2018 (with the same coupon of 9.04 per cent).

Bond

Under section 7, subsection 1, the State must ensure that bearers of such vouchers may use them under the conditions laid down in the Act (a) for purchasing property and other assets sold during privatization of State property, or (b) for obtaining farm land.

When the purchases began, rates did continue to fall for a few weeks, so much so that many were concerned that there would not be enough German bonds to meet the ECB s country debt quota (determined according to eurozone member states GDP and population). But rates have since risen again, and have now returned, in real terms, to pre QE levels.

If Italy and Spain have budget surpluses and declining debt GDP ratios, financial markets will reduce the interest rates on their bonds without the proposed ECB purchases. That would remove the serious risk that the ECB could start buying bonds on the basis of agreed fiscal packages, and then be forced to react if governments fall short on implementing them.

The authorities will issue 35.2 billion in new securities, comprising 15 billion in par bonds, 11.9 billion in discount bonds and 8.3 billion in quasi par bonds.

One reason for this is that long term interest rates are affected not just by the actual bond purchases, but also by financial markets expectations about future monetary policy. Indeed, just one day after the ECB made its announcement and weeks before the purchases began interest rates fell by a fraction of a percentage point throughout the eurozone.

Bonds? Real estate?

Alternatively, low interest rates could push her (or her pension fund) to buy risky long maturity bonds. Given that these bonds are already aggressively priced, such a move might thus set her up for a fall when interest rates eventually rise.