Category Archives: BIGPIGS
Italy will need roughly $400B in the first 6 months of 2012. A comprehensive program to keep Italy on life support will be several times this because it will have to support Italy for 3 years and include recapitalizing its banks. And if you’re going to bailout Italy, you’re going to have to cover: Spain, Belgium, France, and Austria (probably in that order). The numbers boggle the […] Read the rest of this entry
This is unreal. Early this morning central bankers made a surprise coordinated move to stop the banking system melt-down in Europe from worsening there, and from spreading beyond Europe. The debt-fueled financial system contagion has been slowly steam-rolling everything in its path. It had reached the point where banks in Europe could not stop it, were not lending to each other, and the ECB was unwilling/unable […] Read the rest of this entry
Financial system contagion continues to spread and slowly spiral out of control. Interest rates demanded by bond buyers, and implied interest rates from credit default swaps (CDSs) are higher across the board. It doesn’t matter whether you’re a PIIGS country, BIGPIGS country, or anywhere else in the Eurozone. The Brits must be downright gleeful they have access to cheaper money than Germany does […] Read the rest of this entry
Germany and most of northern Europe are highly industrious and productive, and they’re net creditors (are owed money). On average, southern Europe is 30% overpaid / less productive, and they’re the ones that owe money to the north. Debt monetization is going to cause inflation across Europe and devalue the euro. It will make all debts & assets less valuable. Obviously that’s what you […] Read the rest of this entry
Today, the IMF stepped into the fray to arrest the creeping financial system melt-down in Europe. The ECB refuses to ramp-up lending to its own, so the IMF is putting everyone’s money at stake instead. Let’s see…. European banks are being supported/ bailed out by their national governments. These national governments are being further bailed out by the supranational entity- the European Central Bank (ECB). The ECB is hitting […] Read the rest of this entry
Financial system contagion continues to spread and infect more countries — not just the PIIGS now. The remaining AAA-rated countries are seeing their cost of borrowing rise as well (other than Germany). The bond market is slowly increasing the chances of the euro currency breaking up. By year end, the odds may approach 40%. The pressure is mounting -primarily on Germany- to either: allow […] Read the rest of this entry
Either the US economy and stock market are about to “get well” and initiate another bull market, or things are about to take another leg down. My short term indicator -the mini greedometer- helps provide insight…. The past 4 weeks have seen a stunning amount (all-in?) of bluster, threats, hope, hype, and political games in Europe. Yet there remains no plan to solve […] Read the rest of this entry
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