eurozone periphery

CDS buyers hate it, as do holders of Italian, Spanish, Irish, and Belgian bonds. Portuguese bond holders are just fine. There was no reaction in Austria, Germany and France.

The data have shown that deposit flight out of the euro zone into the US just isn’t happening. But what about intra-euro zone deposit flight? Here’s a chart from the Council on Foreign relations that suggests this could be a story supported…

As I see it, we cannot continue with the existing currency arrangement. Countries like Spain (I am reverting to my habit of calling all the deficit countries “Spain” and all the surplus countries “Germany”) simply will not adjust quickly…

Spain appears to have dropped off radar screens. In part, a disorderly outcome of the Greek crisis continues to be threatened. Italian bond yields and CDS prices have risen above Spain's. Yet, ironically, earlier this week, Spain's central…

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…

Dollar firmer across the board amid month end repositioning; US futures suggest modest decline. Markets likely to remain sensitive to DM economic data; Case-Shiller & FOMC minutes are key today. EM continues trade directionless for now…

As the heat wave which has been hanging over Southern Europe for the last couple of weeks steadily eases off there is little sign that any of the warm air which is dissipating is reaching the chilled motors of the European and Chinese…

You can ignore the markets if you want to. But, in time, the markets will not ignore you – Nigel Farage, MEP

There appear to be no happy outcomes here (although as my friend, Tom Ferguson always reminds me, “If you want to have a happy ending, go see a Disney film”). We appear to be entering most dangerous time for Europe since World War II.

It is also worth stressing that this solution is far from perfect. We do not live in an ideal world. It is only one possible way of breaking the vicious circle into which the Euro Area countries have now fallen. It is one possible way, and…