Chart of the Day: European Bank Recapitalization

A chart with a country by country breakdown of the over 100 billion euros of additional capital needed by euro zone banks

Why is a bank that failed the stress tests in Spain getting bought at a 31% premium?

I don’t follow the Spanish banking sector well enough to know what hidden value Banco Pastor has but I find it curious that it is the subject of a takeover bid at a 31% premium by Spain’s fifth largest bank, Banco Popular

The End of the Fake Recovery

This is going to be a relatively long post. But I think it’s important. I have been meaning to update my thinking about the “Fake Recovery” which I heralded in early 2009 as the economy in the US began to turn. My view is that without policy support this recovery is now on its last legs.

Here, I want to review how we got here in the context of the banking system and what that means about the banking crisis right now

2011 EU wide stress test results: 8 failures, 16 near failures

8 banks out 90 banks fail: Five in Spain, two from Greece and one from Austria (Spain’s CAM, CatalunyaCaixa, Banco Pastor, Unnim & Grupo Caja; Austria’s Volksbanken; Greece’s Eurobank & ATEBank). One additional bank, Helaba, the German Landesbank, has pulled out at the last second after also failing. I know that Banco Pastor has a

It’s All About Spain

I was on CNBC’s Power Lunch yesterday talking about European debt markets in the wake of the Irish stress tests. I certainly think the Irish stress tests were a significant event. But the Euro Crisis is really all about Spain

Las Ciudades Fantasmas

Thanks to Iza Kaminska for pointing me to the video below of row after row of incomplete homes in Spanish host towns, las ciudades fantasmas. Spain has the same problem of overbuilding that the U.S. had during its bubble days. Now that things have gone pear-shaped in the residential property markets, you see these ghost

Stressing Out over European Bank Stress Tests

By Marc Chandler The newly created European Banking Authority will be overseeing the stress tests on almost 90 European banks. Recall that the stress tests last year met broad criticism for the lack of rigor. It was anticipated that the EBA would indeed provide for a more robust test this year. However, doubts are already

European Woes Weigh on Markets

Highlights The US dollar is broadly higher against most major and emerging market currencies today, with the yen and Swiss franc being the notable exceptions. With last week’s US employment data taking the immediate focus off the US and the potential for QEII, the market has been able give full attention to the negative European

Interpreting The Stress Tests

Evidently there is now a considerable debate out there about the famous (or should that be infamous) CEBS stress tests. Methodologically all sorts of weaknesses have been identified, but in many cases these are decidedly beside the point. It is important to be aware what the tests were (and weren’t) designed to show. They were,

Monday Market Preview: Equities Higher, Dollar Soft, Bonds Mixed In Wake Of Stress Tests

From the BBH Currency Strategy Team Highlights US dollar is mostly softer so far today vs. the majors, as sentiment remains overall good after the stress test results were released (see below).  Price action since the results came out and the lack of euro follow-through buying suggests real doubts remain in the markets, however (see

Draft Document Suggests Stress Tests Not That Stressful, Euro Gets Hammered

From Win Thin, Senior Currency Strategist at BBH. Newswires have reportedly gotten hold of the draft document for the stress tests, and it’s not pretty. It appears that the worst may be true with regards to how bonds would be subjected to testing. Draft said that haircuts would only be on bonds held in banks’

Dollar Soft Ahead Of Stress Tests As European Data Still Strong

From the Brown Brothers Harriman Currency Strategy Team Highlights US dollar is mostly softer so far today vs. the majors, hurt by stronger than expected data out of Europe (see below) ahead of the European bank stress test results around noon EST.  The euro has recouped most of this week’s losses as the 1.27 area