Europe

Most of the focus these days is on Spain and the periphery - and for good reason. Spain's bond yields are putting it into a potential debt death spiral from which the only escapes are a bailout or default. Moreover, the whole of the…

Spain is involved in two stories today that point to the difficulties that surround sovereign governments that are overindebted in foreign currency. There are a ton of Spanish-language links for that reason.

Rising tensions in Europe continues to be a dominant force in the foreign exchange market, with the euro briefly dipping below the $1.30 level for the first time since mid-February.

I thought I'd point out that the already severely undercapitalised Spanish banking system is being crushed by the spike in Spanish sovereign yields. I continue to expect Europe to continue the extend and pretend approach, creating…

"The chart also shows that the current economic situation is much weaker in several euro-area periphery countries. The recession in Greece has yet to end, and real GDP is now more than 17 percent below its prior peak. While a recovery…

In recent days, policy makers have been most noticeable by their absence. This absence has weakened their credibility and encouraging speculative attention. This is true for Switzerland, Europe and Japan.

I am increasingly worried about what is happening in Spain. It seems that the crisis there is hitting a flashpoint with no obvious means of turning things around. Over the past few days, I have been reading and listening to Spanish media…

Below is the video clip from 60 Minuted giving the average viewer a better sense of what is going on in Europe right now. The video is timely given the problems Spain and Italy are having with their government debt levels rising. Spain is…

Spain has really hit the wall now. Given what we know of how the sovereign debt crisis has proceeded. The likelihood that Spain can escape from the rise in yields without ECB or EU-wide intervention is slim.

The LTRO's provided more than 1 trillion euros of liquidity. An under-appreciated aspect of the virtuous cycle, was the bank balance sheets improved not just because of cheaper cost of capital, but because there was a significant rally in…