liquidity

European stocks, Italian bonds and the euro are rebounding after Italy’s BTP auction and ECB containment strategy. European political uncertainty remains dominant driver; Australia employment better than expected. Bank of Indonesia…

Since everyone is talking about sovereign deficits, austerity and the ECB’s duties and legal limitations, let’s go straight to the Lisbon Treaty text. Below are the most relevant parts of the Lisbon Treaty governing how the EU is supposed…

This is a translation from a Handelsblatt interview with Amgela Merkel. MUST READ.

The scale of the Italian challenge is far greater than Greece's as Italy's sovereign debt is bigger than Greece, Ireland, Spain and Portugal's put together. Greece has, prior to the coming haircuts, about 350 bln euros of debt. Italy has to…

Right now everyone is looking at monetisation and thinking this will save the day. You saw the Lakshman Achuthan video; clearly punters don’t think the US is going to double dip. Buy gold then. Maybe they are right, but I see weakness…

Assuming that the Greek and Italian political situation stabilize, the focus may shift back to the Iberia. The risk is that the new Spanish government will report a larger budget deficit and weaker finances in general than the outgoing…

Countries like Italy are simply not going to be able to grow their way out of the problem. Everyone is recognizing this now. Until Italy was at the heart of the crisis, we could all delude ourselves that this crisis could be met with…

The euro zone periphery was a sideshow. This stuff with Italy is the real deal. With yields at 6.7% and rising, it’s game over for the euro zone. The extend and pretend stuff ain’t gonna work.

If a central bank guarantees investors credibly that they can invest in certain debt instruments and not suffer principal or interest repayment risk, but only currency and inflation risk, some investors are almost definitely going to buy…

Yesterday I was on RT with Demetri Kofinas (@CoveringDelta) talking about the future of the euro zone. Lauren Lyster asked us where this was headed and we both agreed that it really was all about Italy. I just posted on why questioning…