Posts Tagged ‘ EUR ’

Deja Déjà Vu – A Third Summer of European Crisis

May 18, 2012
By
Deja Déjà Vu – A Third Summer of European Crisis

Over the past week, it has become clear that a third annual conflagration throughout Europe is upon us. The crisis has morphed yet again, and like The Hydra, it has come back in a more menacing form. The issue this summer is more profound than the “sovereign debt crisis” which struck last summer. Last summer’s issues were always containable with simple resolve from the ECB. The market forced the issue in sudden manner and eventually a fix came in the form of 3-year long-term refinancing operations (LTRO). Astute observers will notice that today, sovereign debt rates, while higher, have not flared up to the levels they reached last year. European interest rates should not approach summer levels because there is a set playbook that works to contain sovereign rates...

Read more »

Eurozone Breakup – Implications for Financial Markets are Disastrous

September 6, 2011
By
Eurozone Breakup – Implications for Financial Markets are Disastrous

Over Labor Day weekend we saw an unfortunate breakdown in Europe’s approach, strategy, and near-term ability to avoid a financial crisis. In the Mecklenburg Western Pomerian state (along the coast of the Baltic Sea), Germans voted against the Christian Democratic Union which is a repudiation of Angela Merkel’s support and commitment to the Eurozone. I’ll start out by saying that an all-out breakup of the Euro would be disastrous for the global economy and for financial markets. At a minimum, the world would go back into recession with a dire scenario being a redux of the financial crisis. If this were to happen there would be a rush to get to the sidelines quickly and heavy selling in all types of risk assets. As a result of the very...

Read more »