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Economy
S&P and Fitch downgrade a slew of Spanish banks as Europe talks EuroTARP
Last week Moody's cut the ratings of 12 British lenders, including Royal Bank of Scotland and Lloyds Banking Group. This week the other two ratings agencies, S&P and Fitch cut the ratings of 10 Spanish lenders.
Dexia bailout forces Moody’s downgrade of Belgian regional debt
These governments have to know that these bailouts are going to affect their credit ratings. They need to steer clear of worsening that credit profile in a panic environment. The only way they can do so is by clipping bondholders instead of…
It’s official: Spain following Japanese example of propping up zombie banks
Moody's decision to place Popular's ratings on review for possible downgrade is driven by our view that the combined entity emerging after the integration with Pastor is likely to have a weaker credit profile than Popular's standalone…
Is Europe Sliding Into a Double-Dip Recession?
The answer is it depends who you ask. The New York Times put the question to five of us and our answers varied considerably. If there was any overlap in answers I would say it was our general agreement that the euro zone periphery will…
Large writedowns at Austrian bank connected to Hungary, Romania and CDS losses
Whether the writedowns make investors feel relieved because of the alleged balance sheet transparency remains to be seen. However, the balance sheet woes at Erste highlights how active banks within the EU are in cross-border relationships.
The 18-year Round-trip Journey of Greek Bond Yields
In October 1993, when Andreas Papandreou was re-elected as prime minister, Greece's liabilities exceeded 100 percent of gross domestic product. The national debt was 114 percent of gross domestic product. Inflation was more than 14 percent…
“Dexia was not a bank but a hedge fund”
If you recall Global Macro Monitor’s post on Europe's Bank Problem last week, the IMF chart showed very well how banks were struggling to wean themselves from short-term funding sources and increase tangible common equity. The Belgians had…
UK real wages are falling
These numbers are well under the inflation rate and show British consumers becoming victims of stagnating and negative real wage growth.
Manufacturing inflation in a wage deflationary environment
How does manufacturing CPI inflation benefit an economy in which incomes are falling? When inflation rises and incomes are stagnant or falling, the economy rolls over.
Belgian PM says nationalised Dexia is “200% safe”
As we reported on Friday, Dexia, the troubled Franco-Belgian bank, has been nationalised over the weekend. At the time, I indicated this would be a negative for the sovereign’s creditworthiness. Moody’s, the ratings agency, agrees and has…