Tag: default

This is the Framework of a Potential Greek Compromise Taking Shape

This is the Framework of a Potential Greek Compromise Taking Shape

By Marc Chandler Through the venomous comments and erosion of trust, the broad framework of what couple prove to be a workable compromise over Greece’s financial crisis may be emerging.   This is not to suggest that the eurozone finance ministers meeting will reach any important decision. Indeed, the Greek Prime Minister has already reduced his finance minister’s role in the […]

Yanis Varoufakis on fiscal waterboarding and Ponzi austerity

Yanis Varoufakis had a long interview on RT’s Boom Bust yesterday going into detail behind his political candidacy and what he expects SYRIZA to do regarding the unsustainable debt burden that the Greek government now has. Overall, despite his problems with the eurozone’s institutional structure, Yanis believes Greece leaving the eurozone would be a catastrophe for the simple fact that it does not have a currency and any attempt to leave would be seen as a prelude to a massive devaluation, inviting capital flight on a grand scale. This would be a catastrophe for the Greek banking system and wider economy.

Why the European sovereign debt crisis is not over

Why the European sovereign debt crisis is not over

This is an abbreviated post from our subscription series at Credit Writedowns Pro. The present period of optimism is built upon two factors. First, when push came to shove and Italy and Spain were faced with default, the ECB stepped into the breach. Periphery bonds outside of Greece are perceived to have a backstop from the ECB that will limit […]

Economic and market themes: 2014-04-11 – Greece

Economic and market themes: 2014-04-11 – Greece

This week’s theme post will be exclusively about Greece because I think the Greek bond deal is emblematic of trends we see in markets and the real economy. And of course, the big news in the past few days is Greece. Its 5-year government bond deal was over six times oversubscribed, even after a 50% increase in the allotment. The […]

Edward Harrison’s Ten Surprises for 2014, Part 2

Edward Harrison’s Ten Surprises for 2014, Part 2

Yesterday, I began my Ten Surprises List. As a reminder, the surprise list is loosely based off Byron Wien’s list of ten surprises which he has conducting doing at Blackstone and Morgan Stanley for the last thirty years. Wien defines his surprises as events to which investors assign 1-in-3 odds of happening but which he believes have a more than 50 percent likelihood of occurring in 2012. If the list is mediocre, I should get 3 or 4 out of ten. If I guess right at 50% odds, I should get 5 of ten. Anything above 5 means I had a good year.

Argentina – From Bad to Worse

Argentina – From Bad to Worse

We appear to be on the cusp of a more serious crisis in Argentina, as things are moving from bad to worse. Spot ARS has dropped as much as 20% earlier today, while the implied “blue chip” FX rate has fallen nearly 10% over the past two days. The central bank does not appear to be intervening by selling dollars, […]

More Thoughts on the European Endgame

More Thoughts on the European Endgame

My view remains that Europe is in an incipient but unstable recovery vulnerable to exogenous shocks. However, I do not believe this recovery means that crisis is over. Rather, this is a lull before continued stagnation forces Europe to make hard policy choices about who actually remains in the euro over the long-term.

The legacy of government debt in Europe bodes ill for growth

The legacy of government debt in Europe bodes ill for growth

This column argues that the legacy of public debt resulting from the crisis in the Eurozone is a serious threat. Both the size of the problem and the options to address it make life much more difficult for policymakers than was the case in the late 1930s after the collapse of the gold standard. For some countries, a ‘subservient’ central bank might be preferable to the ECB.