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HomeSpanish Unemployment Hits 24.4% !!!
Posted by Larry Doyle on April 27th, 2012 11:26 AM |
Think Spain is speeding on its way over the proverbial cliff? Let’s emphasize the “speeding”.
Continuing on our focus today of issues within the EU, Spain — merely the 9th largest economy in the world — announced today that its unemployment rate hit 24.4%. For purposes of context, that rate stood at a relatively mild 7.9% in 2007.
OUCH…24.4% unemployment is a whole lot of pain!!! (more…)
Who/What is Driving European Sovereign Spreads?
Posted by Larry Doyle on April 27th, 2012 9:11 AM |
The center of our global financial crisis squarely rests upon the Euro-zone in general and a number of peripheral sovereign states specifically. The movement in spreads within this market are often vicious.
The European Central Bank has thrown the kitchen sink in the form of its 3-year LTRO (long term refinancing operation) at the massive debt problem. The LTRO aside, do you get the sense that there is a far greater force at work behind the scenes driving these markets? I do. Who and what are really driving spreads within the Euro-zone?
Let’s navigate as the Journal of International Money and Finance addresses this critically important topic in its April 2012 issue. (more…)
When Will the EU Be Honest with Itself?
Posted by Larry Doyle on October 24th, 2011 8:23 AM |
What does the future hold for the economies within the European Union and by extension the global economic landscape?
I have not written much about the situation within the EU over the last few months for the very simple reason that I have no trust or confidence in the parties involved. Do you?
Over the last few years we have witnessed various and sundry charades by private and public European entities to determine a path forward.
What has been a consistent theme within the charades played out on market participants? (more…)
IMF: “Spain’s Economy Needs Far-Reaching and Comprehensive Reforms”
Posted by Larry Doyle on May 25th, 2010 9:00 AM |
Global markets are down 2-3% overnight. What is going on?
From a military standpoint, all eyes are focused on the Korean Peninsula after North Korea’s admission of sinking a South Korean vessel in late March. How will the world respond? Will the U.S. issue some sort of warning shot across the North Korean bow? Will the international community, and especially those who treasure freedom, rally and aggressively denounce the North Korean’s aggression or will we witness what amounts to a ‘kumbaya’ session?
From an economic standpoint, all eyes are focused on the Euro-zone where fiscal pressures remain elevated. Today the focus is Spain. (more…)
May 15, 2010: Market Week in Review
Posted by Larry Doyle on May 15th, 2010 6:12 AM |
The European Union, the European Central Bank, and the International Monetary Fund (and the Fed, as well, although they don’t want to truly highlight it) provide $960 billion in backstops for the Euro-zone and what happens? The Euro ends the week lower by 3%!! Ladies and gentlemen, that is nothing more than a major “F&%@ Y#&“ on behalf of global investors to the aforementioned central banks and government entities.
Think there is tension in Euroland, and specifically between France and Germany? As The UK-based Telegraph reports, President Nicolas Sarkozy ‘Threatened to Pull France Out of Euro’:
President Nicolas Sarkozy slammed his fist on the table and threatened to pull France out of the euro at a meeting of European leaders deciding Greece’s aid package last Friday, according to Spain’s El Pais newspaper.
The last time there was this kind of tension between these countries, guess who was coming ashore at Normandy? (more…)
Is the Federal Reserve Behind the European Bailout? Audit the Fed!! [UPDATED with video]
Posted by Larry Doyle on May 10th, 2010 12:52 PM |
Is the American taxpayer ultimately bailing out the European Union? Far fetched? Don’t be so sure.
While the focus of the European bailout has been on the European Central Bank, the European Union, and the IMF, little attention is being given to swap lines which were reopened between the Federal Reserve and the European Central Bank.
The ECB has steadfastly fought the idea of breeching the principles which formed the European common currency (the Euro) in order to fashion a bailout for the EU. Did the ECB crater to political pressure by the EU? Or, did the risks of the bailout shift from the ECB to another large central bank? Such as? The Federal Reserve! (more…)
Euro Crisis Merely Delayed, Not Averted
Posted by Larry Doyle on May 10th, 2010 8:39 AM |
They blinked.
The European Union and European Central Bank stole a play from the wizards in Washington to avert an immediate currency crisis in the EU and the potential ripple effect around the world. Did they do the right thing? For me, the question of addressing the fiscal crisis within the EU is not one of right or wrong; rather, when the crisis comes, how large will it be and how long will it last?
The trillion dollar package provided by the European Central Bank, the European Union itself, and the IMF is a combination of loan guarantees and quantitative easing. Shock and awe and punish those who would dare sell the Euro short, right? Clearly, the massive injection of capital will squeeze those who have shorted the Euro, but what about the long haul?
The EU is subverting the very tenets upon which the union was founded. Those tenets precluded this type of financial bailout. (more…)
Greece Facing “Titanic” Problem
Posted by Larry Doyle on February 16th, 2010 10:38 AM |
April 15, 1912. Early in the morning of this fateful day, the unsinkable Titanic went below the waters of the icy Atlantic and sank to its eventual berth on the ocean floor.
In the process of hitting the iceberg that dealt the Titanic its fateful blow, the air of invincibility surrounding this greatest of ships became an air of inevitability.
With all due respect to those who perished that cold night in those icy waters, are we witnessing a similar dynamic playing out on our global economic landscape for the once proud nation of Greece?
Were derivative transactions executed on behalf of Greece by Goldman Sachs mere band-aids covering massive holes in the hull of this once proud nation? No doubt. (more…)
Will the EU ‘Greece the Wheels?’
Posted by Larry Doyle on February 9th, 2010 11:03 AM |
The recent market volatility reflects the fact that our overall economic and market foundations are anything but secure. In fact, dare I say the market over the last few weeks resembles a rollercoaster. While our market rollercoaster, with Uncle Sam’s assistance, climbed the wall of worry in 2009, so far in 2010 we are cascading along and taking some hard turns at full speed. Keep those seats belt fastened.
What has precipitated our 1% upward move this morning? News from the Euro-zone that the EU will backstop Greece’s budget deficit or, if I could stick with our theme, the EU will “greece the wheels” of our rollercoaster. (more…)
When Will Euro-PIGS Fly?
Posted by Larry Doyle on February 5th, 2010 10:56 AM |
Wall Street has more than bulls and bears. Trading desk banter often refers to the presence of ‘pigs’ in the market. Years removed, I can still hear traders saying, “this market’s a pig,” “this bond’s a pig,” and “that account is a pig.” Well, with my morning coffee I saw a new utilization of this famed reference. I chuckled but also realized the seriousness of the new pig reference in regard to the increasingly dire fiscal situation in the European Union.
What are the PIGS across the pond? Portugal, Italy, Greece, and Spain.
The Wall Street Journal highlights the disastrous fiscal situation in these countries in writing, Sovereign Risk Meets Sovereign Reality:
After months of shrugging off debt problems in Dubai, Greece and other smaller economies, markets yesterday seemed suddenly aware of the risks of sovereign default. (more…)
