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Surge in Britons mulling euro transfer, says firm “Independent financial advisory company deVere Group on Tuesday reported a “surge” in the number of British expats seeking advice about moving funds out of some of the eurozone’s most troubled economies following the Cyprus bailout deal. https://twitter.com/zerohedge/status/238980359440695296 The market was just starting to digest the schizophrenic Durable Goods data when chatter broke of the German FINMIN discussing a ‘temporary’ GRExit. In other words, just like Mario Draghi could transmogrify the twilight zone into reality during Merkel’s vacation, and spread unfounded rumors that Europe is fine, now that the Chancellor has returned, the rumors take on the other side of the equation, and the mice no longer can [...] BERLIN (AP) — Germany’s finance minister is rejecting talk of a possible application from Spain for the eurozone’s bailout fund to buy the struggling country’s bonds, a newspaper reported Saturday. This week, European Central Bank head Mario Draghi promised to do ‘‘whatever it takes’’ to preserve the euro. The German and French leaders then said that they were ‘‘determined to do everything to protect the eurozone.’’ Neither mentioned any specific action. But [...] We are about to experience the Euro Exit Crisis. Mish Shedlock and I have a private bet as to whether Italy or Spain will exit first—he says Italy, I say Spain. But either way, it’s gonna pretty much suck. The whole point of exiting the eurozone is because a country no longer has the money to finance its continuing operations. Insofar as Spain, Greece and possibly Italy, that moment will arrive shortly—possibly [...] The wait for the first “euro exit” could soon be over From Gonazalo Lira: We are about to experience the Euro Exit Crisis. Mish Shedlock and I have a private bet as to whether Italy or Spain will exit first — he says Italy, I say Spain. But either way, it’s gonna pretty much suck. The whole point of exiting the eurozone is because a country no longer has the money to finance its [...] The majority of institutional investors and corporates are bearish on the EUR but they are unconvinced that a core eurozone breakup/defection would take place according to JP Morgan global FX strategy survey. The survey was based on the polls from 145 JMP’s clients (76% institutional with $2.5trillion of AUM, and 24% corporates). http://www.efxnews.com/story/13666/majority-investors-bearish-eur-dont-see-emu-breakup-jpmorgan-survey?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Efxnews+%28eFXnews+%29 http://twitter.com/EfiEfthimiou Cutting the negative feedback loop between banks and sovereigns remains key to solving the Eurozone crisis, European Central Bank Governing Council member Christian Noyer said in an interview released by German newspaper Handelsblatt Monday. “We must solve the root problem. The connection between banks and governments must be severed,” said Noyer, who also heads the French central bank. http://www.efxnews.com/story/13580/ecbs-noyer-must-cut-link-between-emu-sovereigns-and-banks?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Efxnews+%28eFXnews+%29 Marc Chandler, Marc to Market
In the five sessions through Tuesday, the Greek stock market has rallied 25%. Equity traders seems to anticipate the election outcome. A new government is not yet in place, but many are still confident it will be announced in the very near-term. At the same time, European officials seem to be much more supportive then they were prior to the vote. They seem more willing to modify the Greece’s program [...] Summary: The last act of the EMU’s death throes has begun. We already knew the two possible endings: further unification or fragmentation. Now we can see far enough to guess about when and how it will end. Probably in a crisis, in which the odds of policy errors will be high — and the odds of unification are low. “It is a national and imperative need to officially ask our partners [...] More selling of newsletters and books than accurate analysis by Mr. Schiff. Surprise, surprise. http://www.forbes.com/sites/realspin…is-not-greece/ The United States Is Not Greece Peter Schiff in The Real Crash and others see the U.S. as having the same problems as Greece and that what we see now in Greece is just a prelude to much larger problems in the United States. This is a false analogy that misrepresents [...] The euro has essentially broken down as a viable economic and political undertaking. The latest rush of events reeks of impending denouement. Switzerland is threatening capital controls to repel bank flight from Euroland. The Swiss two-year note has fallen to -0.32pc, not that it seems to make any difference. http://www.efxnews.com/story/12752/grexit-imminent-rumors-it-will-talk-place-june-2nd3rd-btmu-others Greece exit from the EMU is imminent, the bank of Tokyo Mitsubishi-UFJ said in note. The bank outlined some major factors behind this call. First, the market is filled with rumors that a “planned departure” will take place over the weekend of June 2nd/3rd. Second, the heavy EUR sell-off on Wednesday in reaction to the disappointing outcome of the EU summit. Third, the Deutsche Bundesbank latest comments that Greece is violating the EU/IMF [...] http://www.efxnews.com/story/12752/grexit-imminent-rumors-it-will-talk-place-june-2nd3rd-btmu-others Greece exit from the EMU is imminent, the bank of Tokyo Mitsubishi-UFJ said in note. The bank outlined some major factors behind this call. First, the market is filled with rumors that a “planned departure” will take place over the weekend of June 2nd/3rd. HSBC outlines 2 possible scenarios for Greece exit from the EMU and 2 other scenarios for its saying. The main variable in these scenarios is the outcome of the county’s parliamentary elections which will take place on June 17. http://www.efxnews.com/story/12757/hsbc-sees-2-scenarios-greeces-eur-exit-2-its-staying Cullen Roche, Pragmatic Capitalism Okay, that headline is a little extreme (I actually laughed out loud as I wrote it), but I am trying to think like a European politician here. Let me explain. I’ve already said what I’d do if I was a member of the peripheral countries. I’d go right up to Angela Merkel and tell her that if Germany doesn’t start giving in to some of our demands that I’d take [...]
We already posted a full run down from JPM on what the immediate costs from a Greek EMU exit would be (starting at €400 billion and going higher), but one point that bears repeating is just how much borrowing capacity Greece has under the ELA in the aftermath of today’s news that the ECB is leaving Greek banks to fend for themselves until such time as the Greek recapitalization payment is wired [...] Now that the first parliamentary election vote is meaningless, with no party able to form a coalition government, everyone is focusing on the outcome of the next election, which will take place some time in mid-June. Minutes ago Marc and Alpha (via Reuters) released the results of a poll conducted on Tuesday but just published, and which, if sustained means major trouble for the EMU, because the results show that Anti-bailout Syriza [...] by Joe Weisenthal Jut in case there were any doubt…. If Greece has another election, the anti-austerity SYRIZAT party is likely to clean up. If it comes to that, then we’re looking at a huge game of chicken (which we described here) between Greece and the rest of the EMU. Source Two weeks ago, we showed that when it comes to parabolic charts, Europe sure has a variety to choose from. Yet none are quite as parabolic as the chart enabling it all: the Bundesbank’s TARGET2 claims toward the rest of the Eurosystem, or as we have repeatedly explained (and as Jens Wiedmann confirmed), the sunk cost that Germany will have to foot once the Euro experiment ends, and the EMU falls apart.. which judging by [...] “The traditional political elites are losing control of the system they once dominated.” 12 of the 17 member states of the EMU have seen their governments collapse or been voted out in the last two years. As Stratfor’s Kristen Cooper notes, this is testament to the near political impossibility of implementing austerity and maintaining popular support. The tough truth is that while voters initially turn to the mainstream opposition they soon realize [...] As I discussed recently, the costs and risks of maintaining the eurozone system are already immense and rising. So is an exit possible? Intuitively, the exit from the euro should be as easy as the entrance. Joining and leaving the club should be equally simple. Leaving is just undoing what was done before. Indeed, many popular articles discuss the prospects of an exit of countries such as Greece or Germany.[1] However, other voices have [...] by ZH UBS has the following words to describe: “Given the contraction in the investor base for most Eurozone sovereigns on the back of the increased market volatility and spread widening experienced by most issuers, we expect funding conditions to be quite challenging next year. We expect the majority of the issuers to front-load supply in the first three months of the year and to bring to the market a number [...] From Sovereign Man: … as JP Morgan’s Michael Cembalest points out (hat tip to M. Arnaud Gandon), there is disturbingly little “commonality” amongst the disparate cultures that make up what we used to call the European common market. The chart below shows DNA mappings of European citizens (courtesy of “Correlation between genetic and geographic structure in Europe?” Current Biology Magazine, August 2008). While genetic variations were relatively small, those variations were tied [...] And now you know why Jefferies strategist David Zervos is quickly becoming one of the hottest, must-reads on Wall Street. This gem of a paragraph is from his note today. Of course Europe is not “fixed” just because the currency swap funding rate was cut 50bps. There will be losses, defaults, exit and chaos for EMU in coming months. That has not changed. But the Fed will lead a global effort which brings in the [...] by ZH Among the traditionally meandering permabullish ramblings of a man who continues to ignore the disconnect between reality and his view of the world, tonight’s note by GSAM loss leader Jim O’Neill “Surreal Times” has a very ominous rhetorical question inbetween all the bullish propaganda: “The ECB doesn’t seem to regard 10-year Italian bonds as a bargain and, of course, it is rather tricky as they need to be sure [...] The ECB, IMF, EMU, and EU are on the verge of multiple emergency meeting, if indeed meetings are not already underway. A quick check of the following bond spread tables and today’s yield action will explain. Across the board, yields and spreads widened significantly today. Note in particular the jump in the 2-year bond yield of Belgium.Also note the inverted spread situation for Belgium. The spread to German 2-year bonds is 3.49 [...] by ZH The German constitutional court has already played a substantial role in the country’s participation in the European bailout. Back in September when noting the first participation of the court in the European rescue machinery we noted that “giving the Bundestag’s Budget Committee the final say over the use of the bailout fund is welcome from a democratic point of view, but will add another element of uncertainty to the eurozone [...] |
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