Category Archives: Europe
Strategic Indicator: Greedometer Last week, the greedometer registered 5400 rpm, a respectable but not unexpected jump from the previous week 4800rpm. And with that, we have the end of the year-end rise in the greedometer. The 2011 set of greedometer readings resemble that of 2007. Indeed, both years saw the last or second to last week finish with a 5400rpm reading. Uncanny. And foreboding. (the […] Read the rest of this entry
The big news: The ECB indicated banks bellied-up to the feed-trough that is its new unlimited three year line of credit. More than 500 European banks sopped-up nearly 500B euro of loans. Roughly 300B of this will be used to refinance existing debt. This move by the ECB is a desperate one. The first quarter of 2012 will see a tidal wave of sovereign & bank debt […] Read the rest of this entry
Without question, last week’s biggest economic story was whether Europe would succeed in laying out a credible plan to (once and for all) solve their insolvency problem. In keeping with the bazooka-less incremental changes brought to bear over the past 2 years, last week produced more of the same. All 17 eurozone member countries plus 9 of the 10 European Union (non euro using […] Read the rest of this entry
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
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