Post Tagged with: "Europe"
[PREMIUM] Where Europe is headed and what it means for investors
This is weekly number three for Credit Writedowns Gold. The topic for the week is really unavoidable because it is all anyone talks about: Europe. Let’s be honest, Europe is a complete mess and I believe it will only get worse. The question for you is what will that mean for the real economy and investing. I am going to present my view here
Some Thoughts On IMF Resources
We think markets are getting too bulled up on the IMF headlines today. As the saying goes, “Show me the money!” Until then, we remain skeptical that the IMF will be able to obtain the extra funding it desires. Even if the IMF does get the extra financing, will it make a material difference? IMF/EU programs for Greece, Ireland, and Portugal have not been able to halt the crisis
Münchau: We are fighting the wrong crisis
To me this situation looks pretty hopeless frankly. Policy makers in Europe just don’t get it. The best we are going to get is austerity and partial monetisation by the ECB until the union breaks or sovereign debtors default and banks are recapped. The question is why are they leading us down the abyss
Here’s how much Austrian banks are on the sovereign debt hook for
According to Austrian newspaper Der Standard, Austrian banks had 18.1 billion euros of exposure to foreign sovereign debt at the end of October. The debt to which the banks were most exposed were Polish, Italian, German and Hungarian sovereign debt
Fitch planning to downgrade six European sovereign credits
Swiss daily newspaper Tagesanzeiger is reporting that Fitch, the ratings agency, is about to downgrade six European countries because of the sovereign debt crisis. The paper says that six euro countries were put on ratings review in December and that all of them are likely to be downgraded
Monti, The Full Version
Fortunately the ECB has deep pockets, and as I argue in this post, these will probably suffice to keep short term bond yields down to acceptable levels, and help the banks fund themselves and recapitalise. What the ECB’s LTRO’s won’t do is get new credit moving (one significant part of the initiative involves banks in the troubled periphery economies not having to write down the asset side too much too quickly, so there will be little room for “creative destruction”)
Dollar Softer on Better Risk Backdrop
Dollar is trading on its back foot following solid EZ debt auctions; IMF seeks to increase lending capacity. The key issue today is whether North American players will sell into euro bounce; 20dma seen at $1.2875. UK Claimant count better than expected, US production data in focus; Chinese equities lower on the day
Chart of the Day: The Ultimate European Government Debt Chart
Check out the below graphic which shows General Government Deficit/Surplus as % of GDP on the Y axis, Government Debt as % of GDP on the X axis, and the Government Debt in Euros as the size of the bubble. Pretty cool!
Jim O’Neill: Chinese GDP numbers are “a blow for the hard landing guys”
There has been a lot of discussion about whether China’s growth will slow enough to be considered a hard landing and what that would mean for the global economy and investors. Below is an account from Bloomberg featuring Goldman Sachs Chief Economist Jim O’Neill that is more in the soft landing camp. O’Neill also talks about the European sovereign debt crisis and Greece
Euro and S&P 500 Correlations Revisited
As of yesterday the 60-day correlation stands near 0.78 and the 30-day correlation has fallen from 0.81 in the middle of last month to 0.65. This gives additional evidence of some fracturing of the risk-on/risk-off rubric that has been such an important characteristic of the investment climate
The Massendowngrade Effect
Perhaps the main point to take to heart from the events of the last week is the way the recent ECB liquidity measures have apparently been able to stabilise the debt crisis, at least for the time being, even while it is not clear that they will have the same success stabilising the deterioration in the respective real economies
EU leaders are already backtracking on the agreement of 5 weeks ago
The big news out of Europe on Friday was not S&P’s downgrade of 9 countries, France included. The ratings agency told us weeks ago that it might do this. No, much more important was the ECB’s saying in the bluntest possible terms that the EU leaders are backtracking on the fiscal compact agreed just 5 weeks ago by 26 of the 27 countries