sovereign debt crisis

Neither the current governing coalition nor the German populace is anywhere close to getting where Schröder is. The most Germany will deliver is what’s on the table now: EU fiscal oversight with penalties and potentially expulsion for…

Euro continues to weaken as US markets reopen from holiday; consolidative price action Thursday is being replaced by a return to trend today, with dollar broadly stronger, EM and “risk” broadly lower. European equities are down, and futures…

A headline says that an investment bank survey found almost half the respondents expect at least one country to drop out of the euro zone next year. This is twice the percentage of a couple of months ago. While such a scenario cannot be…

Here is the second version of this foreign news links post that I am starting. The feedback yesterday was good. You all said it makes sense to see what the press in country are saying in Europe since that is the locus of the sovereign debt…

This morning the German government held an auction for 10-year money at just under 2 percent. The auction failed disastrously with a bid-to-cover ratio of just 1.1. The Germans wanted to issue 6 billion euros of 10-year bunds but managed to…

What was to be a subdued period in the markets is turning into a rout. There have been a number of poor developments that have sent the US dollar broadly higher and has weighed on the highly correlated risk assets, equities, emerging market…

Many observers are confused. They cry for the ECB to "man up" and "do what it is supposed to do" and be the lender of last resort. It does have that function for banks, not for sovereigns. The lender of last resort to sovereigns is the…

A unilateral exit would be a devastating event for Italy and the euro zone. Inflation would be high but bank and national solvency issues would recede. If the exit were done under these nationalistic pre-conditions of redomination, most of…

Downgrade watch begins as debt panel concedes defeat - The Hill's On The Money Credit rating agencies reiterated Monday that the U.S. is at risk of a downgrade following the announcement that the supercommittee has failed.…

Without a credible intervention this process almost always ends the same way. There is in my opinion a very high probability that within weeks, or months at most, Greece will be forced to freeze bank deposits as a prelude to leaving the…