With austerity supposedly destroying standards of living (that no real austerity has actually been implemented is a different matter entirely) across Europe’s insolvent periphery, the only recourse said broke countries (here’s looking at you Mario Monti and Mariano Rajoy) have is to desperately attempt to shame those countries who have money such as Germany, Austria, Finland and the Netherlands, aka Europe’s AAA club, into shoveling more and more and more cash into the bottomless [...]
When will the euro collapse? It’s already dead
By Matthew Lynn
LONDON (MarketWatch) — Anyone who spends their time analyzing the euro debt crisis will know that there is one question you get asked again and again. When will the single currency finally collapse?
You can have fun giving a spuriously precise answer — July 28th, 2014, is my favorite (look it up on Wikipedia if you are wondering why).
We’ve never put much stock in the judgment of credit-ratings agencies. But by issuing a series of downgrades of giant banks this week, Moody’s Investors Service may have performed a taxpayer service. Two years ago President Obama and Congressional Democrats told Americans they had strengthened the banking system and revoked too-big-to-fail privileges from the financial giants. Now Moody’s can help Americans understand that the 2010 Dodd-Frank law has fulfilled [...]
Even as Moody is now about a week late on its Spanish bank downgrade where the banks are rated higher than the sovereign (which obviously is kept in check to prevent yields on bonds from soaring even more), here comes the next wholesale bank downgrade:
Moody’s expected to announce ratings downgrade for UK banks this evening - Sky Sources
Exclusive: Big news – I’m told Moody’s will announce downgrades of some of world’s biggest [...]
From Zero Hedge:
Something amusing happened in today’s global capital markets: while European bond markets, especially in the periphery, are sliding following the Spanish downgrade and the Italian bond auction, one market has soared:
That of Greece, which is up nearly double digits (not all that meaningful when you are at 20+ year lows), and whose bankrupt and deposit-free banks are up 20%. Which in turn is pushing U.S. futures higher, despite [...]
Something amusing happened in today’s global capital markets: while European bond markets, especially in the periphery, are sliding following the Spanish downgrade and the Italian bond auction, one market has soared: that of Greece, which is up nearly double digits (not all that meaningful when you are at 20+ year lows), and whose bankrupt and deposit-free banks are up 20%. Which in turn is pushing US futures higher despit the Spanish [...]
Spain is facing the gravest danger since the end of the Franco dictatorship as the country is frozen out of global capital markets and slides towards an epic showdown with Europe.
By Ambrose Evans-Pritchard, International business editor
7:39PM BST 30 May 2012
“We’re in a situation of total emergency, the worst crisis we have ever lived through” said ex-premier Felipe Gonzalez, the country’s elder statesman.
The warning came as the yields on Spanish 10-year bonds [...]
Citigroup, the third-largest US lender by assets, said a hypothetical two-level downgrade of its credit by all three ratings firms could compel the company to come up with $4.7 billion in cash.
The funds would be needed to cover collateral for derivative triggers and exchange margin requirements, the New York-based company said yesterday in its quarterly filing with securities regulators. The sum would be $1.1 billion if only Moody’s Investors Service [...]
UBS AG, Credit Suisse Group AG (CSGN) and Morgan Stanley’s credit ratings may be cut by as many as three levels by Moody’s Investors Service, which is reviewing 17 banks and securities firms with global capital markets operations.
Goldman Sachs Group Inc. (GS), Deutsche Bank AG (DBK), JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) are among companies that may be downgraded by two levels, Moody’s said in a [...]
UBS AG, Credit Suisse Group AG (CSGN), and Morgan Stanley’s credit ratings may be cut by as many as three levels by Moody’s Investors Service, which is reviewing 17 banks and securities firms with global capital markets operations.
Goldman Sachs Group Inc. (GS), Deutsche Bank AG (DBK), JPMorgan Chase & Co. (JPM), and Citigroup Inc. (C) are among companies that may be downgraded by two levels, Moody’s said in a [...]
The never-ending comedy that is Europe’s sovereign-debt crisis has reached its Otter moment. That’s when the world realizes the fundamental principle guiding every important government decision is this: “I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part!”
The quote comes from the 1978 movie “Animal House.” After the dean of the fictitious college tells the Delta House boys that he’s expelling [...]
Readers can take advantage of the weekend which will be calm until late Sunday morning after which it won’t be calm, to familiarize themselves with the hurricane that is headed straight to global capital markets.
Key Upcoming Events
September 9: Deadline for private bondholders to declare participation in Greek Bailout
September 9-10: Meeting of the G7 in France, Spain votes on budget amendment
September 9-14: Potential resumption of the [...]
The US may be the biggest debtor to countries around the world – with net foreign debt almost three times the size of the Indian economy, and total foreign debt about 18 times the size of India’s – but this is one of the key reasons why it is also managing to stay afloat. This, and the fact that it is also the largest creditor to [...]
In tried and true fashion, just as Silver was about to viciously destabilize the global capital markets as it surged to new 31 year highs, the CME stepped in and did its usual 3-6 half life intervention by hiking initial and maintenance margins on silver futures from $11,138 and $8,250 to $11,745 and $8,700 respectively. This is merely the latest margin hike in what [...]
The key macro meme over the past 3 months, starting with Goldman’s “thematic” validation for the surge in the market (which was purely QE2 driven) leading to the firm’s 180 degree shift in outlook from pessimistic to optimistic, had to do with the passage of various recent fiscal US-centered stimulus programs, which were explained by the punditry as a means for America to avoid [...]
We call it chart of the day, but it could just as easily be the chart of the century, as this one chart, presented courtesy of Sean Corrigan of Diapason Securities, captures without a shadow of doubt the revolutionary regime change that occurred in US (and global) capital markets with the advent of cheap credit policy in the aftermath of America’s near brush with [...]
From Bloomberg’s Jonathan Weil
What to Do When the FBI Raids Your Hedge Fund
As if the global capital markets hadnâ€™t suffered enough shocks lately — artillery fire in Korea, meltdown in Ireland, Eva Longoria Parkerâ€™s divorce filing — life just threw Americaâ€™s hedge-fund masters a beanball. It appears the government wants to toss many of them in jail.
This week the Federal Bureau of Investigation executed search warrants at three large hedge [...]