Italy

Dangerous stuff being kicked around at a dangerous time. Our sense is both leaders were relieved by the success of ECB intervention to bring down Spanish and Italian bond spreads and they will continue to rely on Trichet’s monetary bazooka…

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…

The bottom line is this: many in Northern Europe see this crisis as the result of the fiscal profligacy of bad actors which were known before the Euro’s existence to be bad actors. All of these countries except Spain have been running huge…

The point is EMU is a political construct and unworkable in its present state. The question is whether the Europeans want to take the political steps like Eurobonds or fiscal integration that are necessary to support a stable currency…

Last month I wrote an article called “The ECB is the difference” which claimed the ECB was the pivotal institution in the European sovereign debt crisis. I presented two options that the European Central Bank had in relieving pressure on…

The European Central Bank is now deciding how much liquidity to provide because it has received a quid pro quo from Italy that some analysts knew were necessary before the ECB would provide any liquidity. We will see soon whether this will…

The point is that this is a rolling crisis where investors have realised that the sovereign debt profiles right across Euroland have problems. And because there is no lender of last resort, the weakest debtors get plucked off one by one…

Euroland is coming apart at the seams. Belgian/Bund spreads are now also over 200bps along with Italy and Spain. Belgium has just entered the periphery and France is not far behind.

Institutional investors have learned how to create and game self-fulfilling prophecy runs in various asset markets. (George Soros understood this and demonstrated its efficacy with his effort to break the pound in 1992.) Indeed, this is one…

The Telegraph is reporting that the euro zone sovereign debt crisis has reached such a critical flash point that Italy has called an emergency meeting. In Spain, the Prime Minister has delayed his summer holidays to deal with the fallout.