Europe

The Europeans are clearly trying to get comfort on the exposure to Greece in their domestic financial institutions. And if they do get that comfort, we are going to see a soft restructuring. I expect this before year’s end.

I expect a soft restructuring sometime in 2011 followed by a certain degree of dithering and a hard restructuring down the line. But, of course, the tail risk is there.

Dollar firmer across the board after profit taking capped losses; growth concerns still abound. Greece secures confidence vote, next hurdle is austerity vote; market focus shifts to FOMC meeting. Brazil likely to keep inflation target of…

If E.U. leaders are smart, they will understand that the turmoil they fear from a Greek restructuring will be much worse if that default is a unilateral one forced by a population that has taken to the streets.

William Black writes that the non-payment of debt – including bank debt – by the nations on the periphery would lead to severe banking crises and a return to recession in the core of eurozone. This is what is behind the stance of the ECB,…

Nouriel Roubini writes that the current “muddle through” approach to the eurozone (EZ) crisis is not a stable disequilibrium; rather, it is an unstable disequilibrium. Either the member states move from this disequilibrium toward a broader…

Dollar broadly firmer as decision on Greece is delayed until July, Stocks and oil under pressure. Global markets this week are likely to be dominated again by developments in Greece; EUR near 1.42. Beyond Greece markets are also likely to…

The primary difference for Euroland to sovereign issuers is that the Euro can only be created by the ECB – it is the issuer of the currency. The governments of Ireland, Greece, Spain, Germany, etc. are the USERS of the currency. The…

Dollar, yen and Swiss franc are trading firmer; US data today to take back seat to Greek drama. Contagion spreading as Spain auction was weak, 10-year yield at record highs. EM to remain under pressure as spillover from Greece uncertainty…

I still believe the political price for a breakup is large but the chances of one are increasing because the policy decisions that governments and the EU are making cannot be maintained politically in the periphery or in the core. Unless we…