Category: Eurozone Debt Crisis
The analysis published under this category are as follows.
Wednesday, March 14, 2012
European Zombie Banks and Vampire Governments / Politics / Eurozone Debt Crisis
By: Gary_North
The term "zombie banks" refers to banks that refuse to lend to the private sector. They are run by fearful bankers who do not trust other bankers. They do not trust many potential borrowers. According to legend, zombies survive by eating the brains of their victims. It seems to me that zombie bankers must be limiting their diet to brains of other bankers and investment fund managers.
Tuesday, March 13, 2012
Central Banks Beat Up on Private Creditors / Interest-Rates / Eurozone Debt Crisis
By: John_Browne
Last week the Greek government, with the heavy handed support of its larger friends in the Eurozone, succeeded in coercing some 85.8 percent of private sector bondholders to "voluntarily" exchange €206 billion-worth of Greek sovereign bonds for newer bonds with longer maturities, lower coupon rates, and a face value of 53.5 percent less than the original paper. The benignly termed "haircut" (more accurately described as a "scalping") is particularly painful for those buyers who were literally strong armed by their own governments into buying Greek bonds in the hopes of achieving regional financial stability.
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Tuesday, March 13, 2012
Eurozone Debt Crisis: Hope for the Best, Plan for the Worst / Interest-Rates / Eurozone Debt Crisis
By: Axel_Merk
When Greece's woes first rattled the markets two years ago, the pundits predicted a collapse of the euro.
The resilience of the euro has been due to a number of factors, not least of which is that the eurozone as a whole has a broadly balanced current account. As such, a misbehaving bond market doesn't necessarily cause a plunge in the currency, as foreign buyers are not required to fund a deficit or protect against currency weakness.
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Tuesday, March 13, 2012
European Countries Lining Up to Debt Default / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
Today's Outside the Box comes to us from Grant Williams, who covers the world from his perch in Singapore, in his always instructive and always entertaining Things That Make You Go Hmmm... I felt for him right at the outset today, because (like yours truly) he was trying really hard ... not to talk about Greece.And so, he announced, he was going to talk about Spain and about oil; but then, before he even made it through his opening paragraph, there was this:
"... ahhhh NUTS! They did it AGAIN.... ok... the Greek restructuring. It's not as though I could ignore it, now, is it? ... Oil can wait until next time.... no doubt it'll be an issue then too."
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Tuesday, March 13, 2012
European Sovereign Debt Crisis Will Take Years to Play Out / Interest-Rates / Eurozone Debt Crisis
By: Bloomberg
Jerry del Missier, co-chief executive officer of Barclays Capital, spoke to Bloomberg TV's Trish Regan and Adam Johnson today. Del Missier said that the sovereign debt crisis in Europe will take "years to play out" and that the Volcker Rule could "significantly dislocate" some markets for Barclays.
Sunday, March 11, 2012
There Will Be Euro-zone Debt Crisis Contagion, The Next Greek Tragedy / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
… (December 11, 2009) – Greece's prime minister, George Papandreou, told reporters in Brussels on Friday that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see "no possibility" of a Greek default, Bloomberg News reported. Papandreou also said that there was no possibility of Greece leaving the euro area, according to the report.
… (January 29, 2010) – There is no bailout and no "plan B" for the Greek economy because there is no risk it will default on its debt, the European monetary affairs commissioner, Joaquin Almunia, insisted on Friday.
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Wednesday, March 07, 2012
Eurocrats and Their Vassals / Politics / Eurozone Debt Crisis
By: Fred_Sheehan
On February 29, 2012, the European Central Bank (ECB) lent €529 to European banks, most of it, in three-year loans. This was the second such operation, launched with another mind-numbing acronym: LTRO (long-term financing operation). In the first LTRO (December 2011), €489 was lent to European banks. In the February 29, 2012, operation, 800 banks borrowed. According to the Financial Times, "broader collateral rules drew in smaller banks."
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Wednesday, March 07, 2012
The Mainstream Media Still Doesn’t Get the ECB Greek Debt Swap / Politics / Eurozone Debt Crisis
By: Graham_Summers
First off, the details of the swap are as follows: the ECB simply exchanged 50€ billion worth of old Greek sovereign bonds (which were soon to be worth much less if not be outright worthless) for 50€ billion worth of new Greek sovereign bonds which would not be exposed to default risk or any kind of debt restructuring (unlike those bonds held by private Greek bond holders).
Sunday, March 04, 2012
Greece and Credit Default Swaps: Bucking the ISDA Cartel / Politics / Eurozone Debt Crisis
By: Janet_Tavakoli
Credit derivatives were originally hyped as hedging tools to protect the value of a portfolio. For example, if you own a bond, you can buy protection against the possibility of default by paying a protection premium, similar to the premium you pay on an insurance policy. The difference between insurance and the credit derivatives known as credit default swaps (CDS) is that you don't actually have to own the bond in order to "buy protection." But like an insurance policy, you have to negotiate the terms of the contract.
Sunday, March 04, 2012
Debt Crisis Unintended Consquences, What Greece Should Do and What About Ireland? / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
"Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces."
– Sigmund Freud
Let me introduce Mauldin's Rule of Thumb Concerning Unintended Consequences:
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Friday, March 02, 2012
The Greek Bailout, the CDS Market, and the End of the World / Interest-Rates / Eurozone Debt Crisis
By: Money_Morning
Shah Gilani writes:
A not-so-funny thing happened on the way to the latest Greek bailout.
The terms and conditions of the bond swap Greece agreed to before getting another handout constitutes a theoretical default - but not a technical default.
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Wednesday, February 29, 2012
The Key Players Are Showing Their Hands… Will Germany Go “All In”? / Politics / Eurozone Debt Crisis
By: Graham_Summers
As I’ve stated time and again, Germany is the only EU member that has the money to get Greece through this next round of debt payments (14.4 billion Euros coming due March 20). But Merkel isn’t going to give the money without Greece submitting to German fiscal demands.
However, there is no way Greece will submit to German fiscal authority. Heck the Greeks are even going so far as to bring up German war reparations from WWII!
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Tuesday, February 28, 2012
A Primer on the Euro Breakup: Debt Default, Exit and Devaluation as the Optimal Solution / Interest-Rates / Eurozone Debt Crisis
By: John_Mauldin
It's one thing to say that peripheral eurozone countries are better off leaving the euro, but how, exactly? And how severe can we expect the consequences to be, not only for those nations but also for the entire eurozone – and for the rest of us, worldwide? To minimize fallout from the event(s), it would be helpful to have a solid foundation, based on an historical understanding of similar events, on which we could build a reasonable set of expectations.
In the following piece, Jonathan Tepper, my Endgamecoauthor, gives us the cornerstone of just such a foundation. With his London firm, Variant Perception, he has prepared a 53-page report with the very confident title "A Primer on the Euro Breakup: Default, Exit and Devaluation as the Optimal Solution."
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Monday, February 27, 2012
The Way Forward for Greece / Interest-Rates / Eurozone Debt Crisis
By: Submissions
Alasdair Macleod writes: Last Monday night, before the US markets opened after President’s Day, bailout terms for Greece were announced. The detail is secondary to assessing whether or not it will work, or whether only a little time has been bought. Theoretically the deal can work, but it is extremely unlikely that it will. Almost everyone knows or suspects this, but the survival of the European political system is at stake, and this systemic priority is more important than hard economic reality.
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Friday, February 24, 2012
Troika Dictates Greece Tax, Spending and Wages Changes in Next 6 Days / Politics / Eurozone Debt Crisis
By: Mike_Shedlock
The hit parade of demands on Greece keeps right on marching. The Troika has 38 new demands in addition to 10 pages of prior demands that have not been met.
The ten-page list of prior demands need to be met by the end of the month. Fortunately this is leap year so Greece gets an extra day.
Thursday, February 23, 2012
Greece Makes Pact With the Devil Over Gold / Politics / Eurozone Debt Crisis
By: Mike_Shedlock
The one and only thing that might possibly spare Greece the agony of a completely worthless currency is Greece's small hoard of 111 tons of gold.
Thursday, February 23, 2012
Greek Bailout Keeps 'United States Of Europe' Dream Intact...for Now! / Politics / Eurozone Debt Crisis
By: Arnold_Bock
Arnold Bock with Lorimer Wilson write: Underlying much of what we see and don't see regarding the modern-day tragedy that is Greece, is all about preserving the dream of a pan European nation state, a United States of Europe if you will. Only secondarily is it about the solvency of the Greek nation and about bailing out the foreign bank holders of Greek sovereign debt. Let me explain my perspective.
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Thursday, February 23, 2012
Goldman-Greece-Draghi-Morgan-Stanley / Politics / Eurozone Debt Crisis
By: ECB_Watch
We retrace the events of the Goldman-Greece-Draghi controversy and relate it to the Draghi-Morgan-Santley disclosure issue.
Wednesday, February 22, 2012
Herding Greek Cats From Bondage, Gold and Silver Battleground / Stock-Markets / Eurozone Debt Crisis
By: Jim_Willie_CB
Listen to the empty words of the last bailout for Greece. Credibility with the Jackass was lost back on the third bailout, well over a year ago, out of the six bailouts in total. Perhaps it is seven comprehensive final bailouts. The pattern is clear. The politicians, without popular support, forge agreements on debt coverage with the Greek officials. The deals fall through, hit the ground, and expose the lack of support even from the European bankers, led by the Germans. The pattern has been vividly clear for over a year, enough for my dismissal of new accords right away on the basis that the German bankers will not conform and agree to the deals struck. The political leaders in France (Sarkozy) and Germany (Merkel) are due to lose their offices, yet they continue to march around at useless summits attempting to cut last ditch agreements that mean nothing. The people are not willing in Germany to hand over any more than the $3 trillion to date, from the start of the common Euro currency experiment. The bankers, like at the Bundesbank, should attend the summits, but that would be too obvious on where the majority of power is held. What is unfolding is a comprehensive Greek Govt debt default from the inability to contain the situation, the impracticality of the austerity budgets put in place, the wreckage that has come to the Greek Economy, and the intractable solution.
Monday, February 20, 2012
Why Greece Must Exit the Eurozone, How it Will Happen and Why Portugal and Spain Will Follow / Politics / Eurozone Debt Crisis
By: Mike_Shedlock
Several people have asked me about statements I have made that "Greece is in a hopeless situation until it exits the Eurozone."
Actually Greece is in a horrific condition whether or not it exits the Eurozone as the Troika literally destroyed Greece (perhaps purposely to protect French and German banks), by dragging this mess out the way they have.