Tag Archives: Germany

Europe Update….dissappointed!

By Admin | Published: December 7, 2011

Here’s the latest string of newsflow/rumors leading up to the European Union leaders summit.

  1. Germany appears to be downplaying expectations for the summit as one politician said he’s more pessimistic than last week on an overall summit deal and that not all EU are aware of the situation’s gravity.
  2. ECB said they will lend tomorrow a massive $50.7bln 84 day US dollar funds to 34 banks. November auction had only $0.395bln and underscores $/year-end demand is acute.
  3. Germany had better than expected October industrial production (+0.8 vse +0.3) and their 5yr note auction was oversubscribed (unlike the “failed” auction last

    4. … …READ MORE

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Rubber, Road, Europe

By Admin | Published: December 5, 2011

The European debt crisis solution week was getting off to a very good start as the ECB was toyed with a large bond buying program, Italy put forward a “Save Italy” package and Merkozy appeared to agree to a fiscal union. In the lead up to the European leaders’ summit on Friday, the news flow appears to be breaking distinctly positive (all one way) for Europe to effectively deal with the crisis.
The big news over the weekend came from an article in the London Times (not exactly known for breaking financial news) that the European Central Bank was preparing … …READ MORE

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Europe must hang for a solution

By Admin | Published: November 28, 2011

Last Monday, I wrote about how Germany’s finance minister Wolfgang Schauble believed that the turmoil in Europe is not an obstacle, but a necessity and he stated, “We can only achieve a political union if we have a crisis.” The question moving forward for the union is how can this be achieved in practical terms for Europe?
Over the last month, Germany’s Merkel and France’s Sarkozy have met numerous times to discuss the crisis and to elaborate what needs to be done. The most critical step is for their union to exercise oversight and control of sovereign budgets to maintain … …READ MORE

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Icarus expectations for Europe

By Admin | Published: October 17, 2011

Coming out of the G-20 finance ministers meeting this past weekend, here were some of the comments by European leaders.

European financial policymakers promised a “decisive” solution to the two-year-old Eurozone debt crisis.

“The results of October 23 will be decisive,” French Fin in Francois Baroin

Europe would “bring a comprehensive package of measures” to the meeting said German FinMin Wolfgang Schaeuble

Obviously, Europe’s hyperbole is only matched by their inability to deliver in a timely matter. The European debt crisis has now dragged on for 2 years. The pressure is building to have not only a plan in place … …READ MORE

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The World Prepares for Greek Default

By Admin | Published: October 10, 2011

Over the last 48 hours, financial authorities are speeding proposals to shore up shaky global banks ahead of what appears to be a looming Greek default.

Over the weekend, French PM Sarkozy and German PM Merkel met to discuss bank recapitalization plans. They announced on Sunday that they had an agreement on how to proceed, but didn’t release details on the agreement. Sarkozy stated, “We will recapitalize the banks…We’ll do it in complete agreement with our German friends because the economy needs it, to assure growth and financing.” Sarkozy and Merkel stated the plan would be ready in time for … …READ MORE

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Optimism Week!

By Admin | Published: September 26, 2011

After several brutal weeks of Risk-Off trading, the markets appear to be set for a week of unstable, but positive (UBP) Risk-On trading. The predominate story emanating from the IMF/WB meetings is the passing of the July 21st EFSF & Greek bailout agreement as well as the potential development of a new structure to increase the leverage of this structure. There has also been newsflow about the potential for the ECB to cut interest rates at their October 6th by 50 basis points.

Also, the calendar sets up well for this UBP Risk-on environment:

Monday: US cloture vote in Senate … …READ MORE

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EFSF and Greek Voting Schedule:

By Admin | Published: August 31, 2011

Here are the latest time frames for the approval process on the new Greek bailout program and the change to the European Financial Stability Facility. The end of October is when all the approvals are targeted to be finished. Most of this list comes from Reuters except when in italics.

GERMANY – Parliament reconvenes after summer recess on September 5. Approval is expected in September. The opposition Social Democrats has said they will vote for the EFSF/ESM framework agreement, ensuring its passage even if some members of Chancellor Angela Merkel’s center-right coalition defect. Some lawmakers among Merkel’s Christian Democrats have … …READ MORE

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Madrid, we have a problem

By Admin | Published: June 16, 2010

The 10 yr German-Spanish debt spread has widened to 218 pts after a reports have circulated regarding Spanish banks massive borrowing from the ECB and the potential for an IMF, EU and US led $250 billion loan to the country (later denied). Yesterday, the European Union warned Spain that it would have to be more aggressive with their austerity measures to cut their deficit 11.2% of GDP to 3% in 2013. Then the chairman of the country’s second largest bank BBVA, Francisco Gonzalez had this startling comment: “Financial markets have withdrawn their confidence in our country….For most Spanish companies and … …READ MORE

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French and German Officials: Euro Our Currency, Your Problem:

By Admin | Published: June 4, 2010

Engaging in what I perceive as their only avenue to grow, Germany’s Finance Minister Schaueble and France’s PM Sarkozy made statements intimating that the weak Euro is not an issue for the country’s in the European Monetary Union. Given the intransigence of the ECB to aid southern Europe, this is the only path available to countries in the Euro group to avoid an economic slowdown as they enact austerity measures.

The decline in the euro has been the main driver of Germany’s economic growth, Korean press has quoted Germany’s finance minister as saying according to the Korean Chosun Ilbo newspaper. … …READ MORE

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Merkelized Markets

By Admin | Published: May 19, 2010

Just when it looked like the Euro was stabilizing and volatility dropping, the German government stepped in and created more uncertainty and anxiety over the currency. By their nature, politicians engage in a time tested activity known as “Ready, Fire, Aim” or RFA when they want to show their voters that they can act decisively in the face of a storm. They prefer to play the RFA and attempt to kill whatever ails them.

They usually shoot themselves in the foot. Yesterday is a wonderful example of this practice and Merkel is missing a few toes today.

The storm on … …READ MORE

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