Europe's Looming Bust

HenryTo · Posted: Fri Nov 17, 2006 2:16 am Post subject: Europe's Looming Bust

Europe's growth down a notch but as I have mentioned before, next year should be bad - especially given that the ECB doesn't have much flexiblity in monetary policy:

http://www.economist.com/daily/news/displaystory.cfm?story_id=8164601

HenryTo · Posted: Sun Sep 25, 2011 5:38 pm Post subject:

Not surprisingly, nothing really got done during this weekend's IMF meeting:

http://www.ft.com/intl/cms/s/0/5a3b7a9e-e796-11e0-9da3-00144feab49a.html#axzz1Z0hPZ6Xg

rffrydr · Posted: Fri Sep 23, 2011 8:06 am Post subject:

DAX off 61.8 retrace of 09-11 rally.....for now.
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HenryTo · Posted: Tue Sep 20, 2011 10:42 pm Post subject:

Bridgewater on European banks:

rffrydr · Posted: Fri Sep 16, 2011 8:12 am Post subject:

Europe's funding "crisis":

Yellow is proxy for USCP, just now entering CB funding window.
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rffrydr · Posted: Wed Sep 14, 2011 9:36 am Post subject:

How europe sees itself (macroteam):

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rffrydr · Posted: Mon Sep 12, 2011 8:43 am Post subject:

Merrill's current take (from Alphaville):

The real question is the extent to which there would be
contagion towards Euro countries that the Euro zone banking sector can resist.
Our banking equity analysts reckoned under the EBA double dip scenario –which
is a severe stress scenario-, and assuming a 50% loss in Portugal, Ireland and
Greece (but nothing in Spain and Italy), the banks covered in their universe
capital need would amount to about €100bn (to recap to an 8% Basel III core Tier
1 number; BofAML universe represents 50% to 2/3rds of the European universe
looked at by the IMF.
BE
Using data disclosed with the EBA stress test, European
banks hold roughly €650bn of peripheral sovereign debt in their banking and AFS
books, which can be broken down as follows: Greece (€78 bn), Ireland (€14 bn),
Portugal (€30 bn), Spain (€244 bn), Italy (€220 bn) and Belgium (€57 bn)).
BE
Euro bond discussion: this is a discussion really conditional on the appetite for
Euro governments to surrender some national sovereignty in favour of Euro
sovereignty. Although, based on our reading of the press, Germany seems open
to these suggestions in the sense that there is a debate around it, it appears that
France may be less open to these topics, and the debate (popular and
Parliamentary) has been modest. In our view, only further pressure from the
markets would trigger an open discussion of these subjects before the next
couple of years (i.e. past the French and German national elections, due in May
2012 and Sept. 2013 respectively).
BE
Intermediate solution: this has to do with finding a way of increasing the EFSF
action capacity either without endangering the rating of the guaranteeing
countries or ensuring that a possible downgrade would have little impact on the
EFSF capacity of action. This would follow the Gros-Mayer proposal of turning the
EFSF into some kind of credit institutions that could accede the liquidity window
operations of the ECB, or would allow the EFSF to borrow and leverage on its
current capital. In either case, we think the idea would be to find some way for the
EFSF to have a large firepower based on the current euro zone government
commitment structures. We think it is a possibility that the Eurogroup may find an
alternative that sidesteps EFSF’s current legal status and capital structure to give
it new firepower, but we think it is becoming more difficult to satisfy markets with
these kinds of solution, so whether this will be enough to prevent the contagion to
Italy from worsening remains to be seen.

In '09 I was buying Santander Preferred between $15-$17...the low now so far $19.80. (which I am not buy). Moral? Discrimination is still alive.
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rffrydr · Posted: Sun Sep 11, 2011 7:58 am Post subject:

Lagarde shows she knows the problem, leadership. This, right after she trundled into the panic with a 260B recap "thought experiment." She's now had to backtrack and admit there is no "IMF grade" stress test. We'll know the real calculations "later in september." With leaders like this who needs....
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rffrydr · Posted: Fri Sep 09, 2011 2:56 pm Post subject:

Spark's resignation from the ECB was exactly that; Germany's "Plan-B" was the bonfire. This wouldn't be the first time prudence kills.
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rffrydr · Posted: Tue Sep 06, 2011 5:19 am Post subject:

At last some leadership from EX-chancellor Shroeder:

http://www.reuters.com/article/2011/09/05/us-eurozone-crisis-outlook-idUSTRE7832CR20110905

I wonder who our "Shroeder" is?
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HenryTo · Posted: Tue Sep 06, 2011 2:26 am Post subject:

Italian 10-year yields back up over 5.5% as the Euro Zone continues to drag its feet:

http://www.economist.com/blogs/freeexchange/2011/09/europes-debt-crisis?fsrc=scn/tw/te/bl/readyforthefall

rffrydr · Posted: Wed Aug 24, 2011 3:18 pm Post subject:

The rate bump was a stupid act of hubris by europe's first french central banker putting on german "airs." Trichet thought it took a hero, but it took a....

Nice bookend here to my original post showcasing that famous photo of Mitterrand and Kohl holding hands and explaining why europe would hold and much more than a union of currency. Well that has proven to be not entirely true:

http://www.bloomberg.com/news/2011-08-22/merkel-never-holding-hands-with-sarkozy-betrays-european-leadership-crisis.html
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HenryTo · Posted: Mon Aug 22, 2011 8:46 pm Post subject:

Bridgewater's latest on the Euro Zone:

rffrydr · Posted: Mon Aug 22, 2011 7:56 am Post subject:

Is this so bad?...really?!

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rffrydr · Posted: Fri Aug 19, 2011 12:07 pm Post subject:

Truly I admit. I did not expect things to come to this--either way:

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rffrydr · Posted: Thu Aug 18, 2011 8:06 am Post subject:

Yes, the mystery train. Always good to get them chattering:

http://www.cnbc.com/id/44173547
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