The Horrific, Worst-Case Scenario For Spain
Spain is in trouble.
The macroeconomic outlook continues to deteriorate as unemployment rises. Angry citizens are protesting austerity in the streets.
At the same time, Spain has just unveiled its 2013 austerity budget, but the overly-optimistic macroeconomic assumptions underlying the plan foreshadow missed deficit targets in the coming quarters, which will likely force a new round of austerity measures, further worsening the economic contraction.
Meanwhile, the Spanish region [...]
BRUSSELS — Worries about Greece’s electoral turmoil and Spain’s spiraling borrowing costs are piling the pressure on European Union leaders meeting in Brussels on Wednesday amid renewed market pressure to keep the region’s debt problems from getting worse.
Spain’s prime minister warned that his country can’t continue much longer with its current high borrowing rates and urged a joint European response to help.
Mariano Rajoy and newly elected French President Francois [...]
The Italian market is about to break 08′ lows.
LONDON — In a season of nightmare projections for Europe, this one could be the scariest: Greek leaves the euro currency union at the same time Spain’s banking system is collapsing.
The anatomy of the eurozone bank run
A bank run is now happening within the eurozone. So far it has been relatively slow and prolonged, but it is a run nonetheless. And [...]
Today Egon von Greyerz told King World News that dominos are falling daily and we should expect to see more chaos in the banking system, including failures. Egon von Greyerz is founder and managing partner at Matterhorn Asset Management out of Switzerland. Von Greyerz also said we are edging closer to panic and he expects this will accelerate the flow of funds into gold. Here is what Greyerz had to [...]
Last Monday I was in Paris and was asked to do a spot on CNBC London. I arrived at the studios an hour early due to a misunderstanding of the time zones, so while trying to catch up on the news I listened to CNBC. I had just written about Spain in last week’s letter and guessed that was what they wanted to talk to me about, but for the full hour [...]
While Jose Tomas, Spain’s finest matador, was the undisputed star of the evening, the honour of killing the last bull on Catalan soil fell to torero Serafin Marin, a native of Barcelona.
When Marin delivered the estocada, a half tonne bull dropped to the sand, just as reflections of the sun faded in the matador’s suit of light.
On a day when [...]
1) U.S. dollar could ‘collapse’: UN
“The United Nations warned on Wednesday of a possible crisis of confidence in, and even a “collapse” of, the U.S. dollar if its value against other currencies continued to decline.
In a mid-year review of the world economy, the UN economic division said such a development, stemming from the falling value of foreign dollar holdings, would imperil the global financial system.
The report, [...]
If you strip away the political correctness, Chapter Three of the IMF’s World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time.
Spain, trapped in EMU at overvalued exchange rates, had a general strike last week
The IMF report â€“ “Will It Hurt? Macroeconomic Effects of Fiscal [...]
If we somehow make it past the money needs of Greece in April and May and that is a big if, the next significant money raise will need to be done by Italy
In addition to a sizable money raise in March, Italy needs to raise significant amounts of money in June. It won’t necessarily be the easiest thing to get done, but FT tells us:
Italy, apparently, has a Ã¢â‚¬Å“robust domestic [...]