Why A European Banking Union Is Far From Imminent

The implicit risk transfer from periphery to core – and loss of sovereignty this assumes – that is inherent in any banking union (or Euro-FDIC) is not just a stumbling block for the Germans, Finns, and Brits; without fiscal integration it is a non-starter (which no matter how much chatter or ‘coming soon’-phrases we see, is not occurring within weeks/months given the Treaty changes and ratification required). Stratfor’s Adriano Bosoni does an [...]

June 14th, 2012 | Tags: , , , , , , , , , , , , , , , , , , , | Category: All | Leave a comment

EUR breaks July Lows as GRE/PTE CDS Surge

by ZH

Despite some positive macro data (FRA) this morning, peripheral country bond yields (and CDS) continue to rise unwaveringly towards the endgame where European leaders are forced to actually do something as opposed to paper over gaping cracks with piecemeal solutions that are seen through by market participants within hours of release.

Greece 5Y CDS rose 210bps to 3235bps (running equiv.)

Portugal 5Y CDS rose 50bps to 1110bps.

Perhaps [...]

September 9th, 2011 | Tags: , , , , , , , , , , , , , | Category: All | Leave a comment

History of Credit Derivatives

1975

-NYSE ended fixed commissions, leading to dropping commission rates and broker consolidation.
-Large number of boutique investment banks.
-Severe recession and oil price shock.
-Collapse of New York City real estate market.
-New York City defaults on its municipal bonds.
-Major banks hover on the edge of bankruptcy and crush of non-performing loans.

1978

-Glass Steagel Act passed.
-Mutual funds and money market funds start growing rapidly.
-U.S. dollar declines.

1979

-Oil price boom.
-Gold and precious metals prices on a huge [...]

February 9th, 2011 | Tags: , , , , , , , , , , , , , , , , | Category: All | 3 comments