Markets

The European debt crisis is straining the Paris-Berlin axis, the pillar of EMU. French banks are heavily exposed to Italian debt, with some estimates putting public and private sector exposure at more than $400 bln at the end of H1 (without…

You saw my comments in the last post on the damage Europe has done in making a mockery of the sovereign CDS market. The Italy situation is worse because of this. Below is a video clip from Monday night of the Lang & O’Leary Exchange, a…

Right now everyone is looking at monetisation and thinking this will save the day. You saw the Lakshman Achuthan video; clearly punters don’t think the US is going to double dip. Buy gold then. Maybe they are right, but I see weakness…

Given the poor track record of intervention, unilateral or multilateral, sterilized or unsterilized, there may be no compelling need to understand why the $100 bln intervention is not sticking. All sorts of possible explanations seem partly…

The Ministry of Finance is pumping money like mad into the weakened Chinese financial sector, over 1 trillion yuan, in order to shore it up from the souring of loans from all of the malinvestment over the past few years. If the Chinese…

If you are still inclined to give Greece the benefit of the doubt, I suggest you study the works of Egan-Jones, a credit rating company located in Haverford, Pennsylvania. Contrary to most other rating companies, Egan-Jones does not receive…

The euro zone periphery was a sideshow. This stuff with Italy is the real deal. With yields at 6.7% and rising, it’s game over for the euro zone. The extend and pretend stuff ain’t gonna work.

So what is the trade? If Italy continues to blow out and a big bazooka EFSF bailout fund is not attainable, the EU will be faced with certain death or massive ECB bond purchases. We think they will choose the later, which makes the Euro a…

Switzerland reports its October consumer prices on Monday. This could be important. The Swiss National Bank's decision to cap the franc took place on the same day that the August CPI was reported (Sept 6). It showed a 0.3%…

Events continue to spiral beyond the control of European policy-makers. With so much time and effort being put into Greece, the troika now finds itself facing a much bigger problem: Italy. While it has been difficult to remain committed…