Europe

Two topics today: The first is Spain and the second is record high oil prices.

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…

Germany had a relatively small trade surplus in the early 1990s. But after the euro was formed, the surplus vaulted higher. The clear implication is that Germany's export sector benefitted hugely from the introduction of the euro.

Many orthodox economists ironically adopt something close to a “loan pusher” argument: the excess global saving pushed interest rates down, leading to excessive borrowing by debtor nations that consumed beyond their means. Although the…

I don’t want to be too glib here. I recognize that policymakers are in an extremely difficult position and that there is no longer any easy solution, but railing at the markets rather than trying to understand why they are doing what they…

A recent story in German magazine Der Spiegel highlights the efforts in 2005 of German Chancellor Gerhard Schroeder to relax the penalties for deficits in breach of the euro zone's stability and growth pact. It is a good review of the…

On the heels of a sovereign downgrade, the following press release was issued by Moody's Investors Service today in conjunction with its ratings review of several Italian banks.

Daily commentary Since I have a decent amount of links, I thought i would do a special Sunday daily commentary. The issue I wanted to highlight is credit and how it gets created. At some point I may make a longer version of this to flesh…

Moody's Investors Service has today downgraded Italy's government bond rating to Baa2 from A3. The outlook remains negative. Italy's Prime-2 short-term rating has not changed.

The problem cannot simply be a problem of current account imbalances—we’ve got them all across the US states. And the US, itself, runs a chronic current account deficit. But the US federal government is sovereign, it issues its own…