Post Tagged with: "Spain"
Dollar Pops Back
Dollar is broadly stronger against the majors and EM currencies after Greece rejected calls for direct budget control. Asian stocks fell, with the MSCI Asia Pacific index down 0.9%; EuroStoxx 600 is currently down 0.7%. Economic data saw Spanish Q4 GDP contract, EZ confidence rise less than expected; US personal income
A Month In Spain That Didn’t Shake The World
Spain’s economic problems are very grave. The country is facing a decade long depression, and if enough young qualified people leave during this period then the country could enter a negative dynamic from which it will never properly recover. At the outset (2007) I and others argued for a 20% internal devaluation to shift resources over to the export sector. This did not happen, and virtually no one is interested in the idea. The main priorities are still reducing the deficit, and restructuring the financial sector without injecting any significant quantity of public money. Both these policies are contractionary in their impact. In addition the proposed labour market reform is timid, and won’t act quickly enough to stop the rot on the growth front
Chart of the Day: Developed economies’ debt levels by sector
This is a great chart below via the Wall Street Journal. It shows the total debt to GDP ratios for the largest developed economies in the world broken down into four sectors: households, non-financial corporations, financial institutions and government
Spanish government doubts it can achieve deficit target
I have been saying for a few months now that all of the periphery would miss their targets as depression took hold. Belgian newspaper De Standaard reports that the new Spanish government is fearful. My translation from Dutch below
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
[Premium] Willem Buiter: “We will certainly have a panic stage before the debt crisis is resolved” (part 2)
Continuing from part 1 of the Willem Buiter interview with het Financieele Dagblad
Buiter: “The temporary pause in the European debt crisis is as deceptive as the frenzy before the New Year”
The countries of the eurozone will eventually emerge from the sovereign debt crisis — with pain and difficulty
[Premium] Willem Buiter: “We will certainly have a panic stage before the debt crisis is resolved” (part 1)
The countries of the eurozone will eventually emerge from the sovereign debt crisis — with pain and difficulty. That is what Citigroup chief economist Willem Buiter, on a visit to Amsterdam on Friday during a roadshow, expects. Spain and Italy will get their finances in order and the ECB will jump in when necessary. Deep integration of fiscal policy, according to him, is not necessarily required
Successful Auctions Boost Tone in Europe
Better than expected reception to Spain and Italy’s debt auctions have spurred risk on; dollar softer. BoE, as expected, left policy unchanged, ECB expected to do the same; Japan’s current account shrinks. US advanced retail sales expected to rise to 0.3% from 0.2%; thoughts on the EM central bank outlook
Thoughts Ahead of Spanish and Italian Bond Auctions
Spain and Italy begin this year’s funding operations with bond auctions tomorrow and Friday. Although the euro is bouncing along its recent trough against not only the dollar, but against many of the other major currencies as well, there has been a modest improvement in some of the measures the market has focused on as metric of stress. Of course there are other signs that still show a high level of paralysis, including the fact that overnight deposits at the ECB continue to set record levels and are approaching 500 bln euros
The fireworks will start with Spain or Italy
Here’s what I had to say about Europe on Capital Account with Lauren Lyster on Thursday night. I’m not bullish on the real economy there (but I still expect relative share outperformance due to lower P/Es). The US is having a bit of a data surge to the upside: housing, employment, manufacturing, all of these numbers have been better of late
Right Now the Debt Crisis is European, But the Problem is Global
In addition to the European economic recession exerting a drag on the rest of the world, the real threat of bankruptcy of a major financial institution can rapidly spread throughout the globe as a result of a run on the banks or the opaque interrelationships between European banks and financial institutions in other nations