Merkel: ‘The ECB has a clear mandate, stability of the currency’
This is a translation from a Handelsblatt interview with Amgela Merkel. MUST READ.
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Europe
A policy response must be forthcoming in short order or the contagion will overwhelm everything else
The scale of the Italian challenge is far greater than Greece's as Italy's sovereign debt is bigger than Greece, Ireland, Spain and Portugal's put together. Greece has, prior to the coming haircuts, about 350 bln euros of debt. Italy has to…
CDS are a mess
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…
This is why people are buying gold now
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…
Dancing with Contagion
Markets have shifted back to crisis mode amid uncertainty over Italian economic reforms. Three likely scenarios remain after Berlusconi’s upcoming departure; Italian 10-year above 7%. UK September trade data unexpectedly widened, on…
Sean Egan says Spain could be the next domino in the euro zone crisis
"If a country isn’t growing, it’s debt is growing as a result. So, any interest beyond, let's say 2.5%, is a problem. And with Italy's growth shrinking, as a result of the austerity measures they're putting in place, we're beyond it.…
Ignore Egan-Jones at Your Peril
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…
Italian Politics in the Spotlight
European shares are rebounding after a two-day decline; dollar is mostly higher in G10. Italian politics remains front and center ahead of budget vote; UK outlook remains sluggish. With US calendar light, markets likely to focus on Fed…
Italy’s Political Drama: Tuesday Climax?
Assuming that the Greek and Italian political situation stabilize, the focus may shift back to the Iberia. The risk is that the new Spanish government will report a larger budget deficit and weaker finances in general than the outgoing…
Italy’s debt woes and Germany’s intransigence lead to Depression
Countries like Italy are simply not going to be able to grow their way out of the problem. Everyone is recognizing this now. Until Italy was at the heart of the crisis, we could all delude ourselves that this crisis could be met with…