Europe has just eviscerated the sovereign CDS market
What happens when you get a default that equates to a 50% loss for most investors without triggering default insurance? Massively negative unintended consequences.
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Browsing Tag
Europe
Another Bear Market Trap
The sharp rally off the October 4th intraday low of the S&P 500 is a result of the assumed prospect of a real plan to save the Euro and slightly improved U.S. economic numbers indicating that we may not be in a recession right now. In…
Roger Bootle on the European Crisis Deal: Get Austere or Die Trying
Here's Roger Bootle talking to Bloomberg's Maryam Nemazee about the deal hammered out yesterday to 'save Greece.' He is quite sceptical. First, the 120% debt to GDP figure that the deal is predicated on reaching is still high and assumes a…
A bad haircut
Are these haircuts on Greek debt really such a good idea? Or are they really just a stopgap that will make things all the worse in the long-run?
Sure, Mr. Market seems to think they’re fantastic. But then, Mr. Market has always been…
Quantitative Easing!!!
The BoJ announced today that it will expand its asset purchase programme by JPY5trn (USD66bn), with all the purchases being directed at JGB's. Add that to the GBP75bn (USD120bn) by the BoE, CHF50bn (USD57bn) by the SNB and the EUR341bn…
How the latest emergency euro summit addresses the sovereign debt crisis
Markets’ initial reaction to the latest EU emergency summit has been positive. Risk assets are trading up, risk-sensitive currencies are up, European bank stocks are up, and the broader stock market is as well. This relief rally is…
A Game of Positions
Global stocks and risk sensitive currencies are up significantly after the 14th emergency summit. Outcome satisfied downbeat expectations, details remain short; price action reflects positioning. BoJ left rates on hold but expanded asset…
Berlusconi has his priorities straight
Watch the video. It plays Silvio Berlusconi’s encounter with Danish Premier Helle Thorning-Schmidt a second time in slow-motion so you can see where Berlusconi’s real priorities are.
Full Text: Euro Summit Statement on Greek Hard Restructuring
We have highlighted in bold the important bits. (We now have an analysis of the deal. See "How the latest emergency euro summit addresses the sovereign debt crisis".)
Note that while the statement says in point 12 that the notional…
Four biggest lessons from Iceland’s brush with national bankruptcy
Poul Thomsen wrote an article on the IMF’s blog site about Iceland that I would to highlight. The lessons bear repeating given the economic problems in Europe and the US. The IMF worked with Iceland to stabilise the economy and avoid…