Post Tagged with: "Europe"
Risk Off Monday
The US dollar is firm against all the major and emerging market currencies. Equity markets are lower, giving back all of Friday’s gains and more. The euro has dropped 1% and the next level of support is seen near $
News Links: Growth Is Not an Easy Solution for Europe’s Woes
News links for 11 Dec 2011 on European growth, the sovereign debt crisis, Technology IPOs and patents, US elections and more
The EU’s Camouflaged Bazooka
Many were disappointed that the EU Summit didn’t conclude with a hard number backstop for the ‘zone’s sovereign debt rolling over next year. We believe if you scratch the surface the bazooka is there
The four most surprising things about the European bank stress tests
On Thursday the European Banking Authority released the results of the latest European stress tests showing a total capital need of €114.7 billion across 71 banks. While German banks might argue that they got the worst of the surprises, there are plenty more in store for everyone
Will the latest deal in Europe solve the debt crisis?
Place your wagers; poll embedded on the site. Answers: Yes; No; It depends on what ‘solve’ means
Look for North America to Fade Euro Moves
The dollar is broadly weaker as sentiment improves in the wake of an agreement on fiscal integration. European officials have struck what appears to be significant agreement; one of the costs is a new split in Europe as the UK and others are not in agreement. UK trade deficits narrows but unlikely to change economic outlook; China’s inflation decelerates
Full Text: Statement by the Euro Area Heads of State or Government on Fiscal Integration
Below is the statement released by euro area governments in support of the policy approach spearheaded by Angela Merkel and Nicholas Sarkozy to deal with the European sovereign debt crisis
The Rotten Heart of Europe
Frederick Sheehan writes that the purpose of this dispatch is to dispel rumors that current front-page treaty talks have any economic meaning. The European and U.S. stock markets react with a 3% or 4% gain after vague announcements, but we are getting closer to a day when the false prophets are stripped bare
Additional Liquidity Is Not A Solution
In sum, it seems clear that the next few days will not produce a long-term solution to the European debt crisis. However, the various nations and financial institutions realize the gravity of the situation, and it seems likely that they will make every effort to reassure the bond markets and stop interest rates from continuing to climb, at least temporarily. It therefore would not surprise us to see a combination of financial institutions inject massive doses of liquidity into the markets in an effort to buy some time. While markets profess not to like government interference, they do love liquidity, and another brief rally is quite possible. However, this treats the symptoms rather than the disease. A dose of liquidity does not cure insolvency, recessionary economies, massive budget deficits and huge debts. At best, this will be another case of kicking the can down the road. At worst—-we don’t even want to think about it
News Links: Is Denmark on Verge of Icelandic Style Crash?
Financial news links for 8 December 2011 including stories on Denmark and Danish bank capital, the European sovereign debt crisis and Spanish banks
Full text: Letter from Angela Merkel and Nicloas Sarkozy on the European debt crisis
The following letter from the German Chancellor and the French President was addressed to European Council President Herman Van Rompuy
Draghi Turns On Spigots, but Still a Drag
The ECB delivered the much expected 25 bp rate cut, though the decision was not unanimous. There was some immediate disappointment by some players positioned for the outside chance of a 50 bp move. The ECB addressed the liquidity and collateral measures to address the credit crunch. The ECB will provide two 3-year refi operation, which will replace the previous long-term repo operations (LTRO). Participating banks will have the option to return the funds after one year