Europe

EUR/USD headed back below 1.347 as European stocks extend early morning losses; DAX down 2.7%. G20 communiqué indicates that EZ actions to increase EFSF flexibility is likely; details remain light. Singapore’s inflation continued to surge…

At some point soon, maybe tomorrow, I will be writing an update to two posts: The Fake Recovery and The recession is over but the depression has just begun. The gist of those two posts is still operative and also very relevant, namely that…

The future of Euro is going to be determined by the Greek street in the next few weeks and how they react to the new austerity measures. G-Pap has his work cut out convincing the population the pain is worth it. Stay tuned.

I was on BNN this afternoon talking about the Fed running out of ammo, America banks getting downgraded, European banks needing $300 billion in capital, and Greece defaulting on its debt obligations plus a host of other issues – none of…

"The larger the haircut that bondholders accept, the better the outlook for the Greek sovereign from a credit quality perspective after the default," said Tony Stringer, a country debt analyst with Fitch.

Here’s a great chart just released by the International Monetary Fund for Greece, Portugal, and Ireland as well as Japan, the US and the UK. Note that almost half of the US federal government debt is held by the Federal Reserve and the…

Countries like Slovenia have their own problems. As the euro zone economy worsens, their willingness to support bailouts decreases. And the European institutional principle of unanimity will almost certainly mean that bailout fatigue leads…

I want to highlight three things here from Wolfgang Munchau on the euro zone because he reaches conclusions I have reached. Below are excerpts of what Munchau writes about a Greek default, Italian solvency and euro zone dissolution.

At the beginning of the year, the 60-day correlation between Irish and Greek 10-year yields was above 0.90. Today, the correlation stands at -0.42. At the same time, Irish 10-year bonds yields have become significantly more correlated with…

10% ‘internal devaluation’ in Germany took eight years. We are talking now about 20-30% wage and price cuts in Greece and Ireland. How realistic is that?