liquidity

Today, it is euro banks that are the problem. For example, Goldman Analyst Alan Brazil suggests that euro banks need $1 trillion in additional capital. This has created distress in funding markets, particularly because of US money market…

The fact that Italy's 5-year CDS prices remain elevated (376 now vs 388 on Aug 4 peak) warns that ECB bond buying, fiscal austerity has not convinced private sector investors that the worst is truly past. This offers a poor backdrop from…

We should observe a blowout in Eurozone interbank spreads. And while we may still see this in the coming weeks, we have not seen anything resembling 2008 levels of panic.

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.

The Italian debt markets are a lot calmer this week than they were the week before last because the level of Italian bond yields is now more or less completely guaranteed by the European Central Bank (the ECB). However, Italy’s problem is…

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…

As usual, I find Felix Zulauf’s commentary very perceptive. He has been right consistently for the whole of 2011 in predicting where things have gone. What he is saying is that the fundamentals in the west are weak and now that growth is…

The first is the size of the ECB bond purchases. Second, the Franco-German summit tomorrow attracts attention. Third, the market continues to pare long Swiss franc positions with the local press suggesting the SNB and government may take…