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On Spain’s death spiral, regional bailouts and Germany’s ability to profit from crisis
Daily commentary
Just a quick word here on three interlocking stories involving Spain and Germany that have come up via the US and European press. Right now, Spain is at the center of the European sovereign debt crisis. The spread…
What is wrong with people?
Warning: This commentary is very DISTURBING - not for the faint of heart.
Two days ago, a friend of mine told me via email about a comment on a blog post about whether MBA schools were incubating criminals that was truly disturbing. I…
Confusion over Spanish bailout seniority and evidence of slowing in US and China
Note: Before I begin today's summary, I should note that my schedule will be very spotty over the next three weeks as I am on a working vacation. That means I will not be at work but I will be posting to the blog from time to time. I also…
Full text: Spain Bank Bailout Memorandum of Understanding
Below is the full text of the European' Commission's Memorandum of Understanding with Spain regarding the bailout of the Spanish banking sector released earlier today.
German – Spanish 10-year spread reaches record 610 basis points
Right now the spread between Bunds and the Spanish ten-year is 609 basis points. The catalyst for the increase in Spanish spreads may be the news that the indebted Spanish regional government in Valencia is on the verge of seeking a bailout…
Evidence of Coming Recession Is Overwhelming
We first noticed the first signs that the economy was beginning to soften about three months ago. Now the evidence of a slowdown has become so overwhelming that it is difficult to avoid the conclusion that we are headed for a recession. We…
Daily: On Spain’s death spiral and the exogenous threat of drought
Two topics today: The first is Spain and the second is record high oil prices.
Daily: Different approaches to generating sustained full employment
I want to highlight three articles on the issue of jobs and full employment because they give one a view of the employment issue from various angles. First is the brief history of unemployment in Britain covering data from 1855. What we see…
Grantham and Faber legging into Europe as values begin to proliferate
My thesis at the start of the year was that European equities would outperform despite the sovereign debt crisis because of relative value vis-a-vis the United States. It seems that Jeremy Grantham and Marc Faber agree with those sentiments…
Why bank bonds are sitting ducks in the next downturn
Two years ago I developed a thesis about the negative effect of the Federal Reserve's interest rate policies on bank balance sheets based on my understanding about the history of zero rates in Japan. For bank bond investors, this should be…