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Europe Channel: Latest Posts
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Europe
How This Gets Even Uglier
At this risk of beating a dead horse, I reiterate that I don’t see how the European situation comes to a happy conclusion. Conditions in Greece appear to be deteriorating rapidly. Via Athens News, retail sales are in freefall: Retail sales by volume fell 8.9 percent year-on-year in November after a 10.8 percent drop in [...]
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The Wilder View
I Still Don’t Get Why the ECB Hiked Rates
I still don’t get why the ECB hiked rates in April and July of 2011. I questioned this using bond market pricing back in August 2011. Now I question it once more using the ex post trajectory of mortgage rates. Across the Euro area, 43% of total home loans are made on a variable rate [...]
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Europe
I Don’t See How This Can Continue
The European unemployment numbers are out. The story from the Financial Times: Unemployment in the 17 euro countries climbed to 10.4 per cent in December, with the November rate revised upwards to the same rate, setting a fresh record since the introduction of the single currency in 1999. So-called “peripheral” members such as Spain and Greece recorded [...]
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Peterson Institute for International Economics
Lessons for Europe’s Fiscal Union from US Federalism
The euro area crisis and debate over fiscal reform have led many observers to pray for salvation by a modern, European version of Alexander Hamilton. By this they generally mean someone capable of leading a movement for a robust fiscal union and implementing this vision (see for example McKinnon 2011). Europe has instead, they lament, [...]
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RGE Analysts
Has the 3-year LTRO Changed the Path Forward for the EZ Crisis?
There has been relative calm in the EZ crisis since December last year, when the ECB announced a three-year long term refinancing operation (LTRO) and a sharp widening of its collateral requirements. Government bond yields fell in the periphery and debt issuance in January went remarkably well, particularly for Spain and Italy. Has the LTRO [...]
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Nouriel Roubini's Global EconoMonitor
Draghi, Soros, Geithner, Roubini, Calderon, Merkel: In Their Own Words From the WEF on the Europe Crisis Via Bloomberg
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Europe
Europe Needs a Real Fiscal Union
The rhetoric is heating up as we head into Monday’s European Union’s summit. On one hand, we see rumors circulating that a deal in the Greek debt talks is in the works. Via the Wall Street Journal: But in Athens, the mood Saturday was upbeat. “We really are one step away from a final agreement [on [...]
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RGE Analysts
German Proposal for Greece’s Compliance: Accelerating Eurozone Exit
At the top of my list of to do’s for the past few weeks has been to update the post on Greek PSI that I wrote just before Christmas to include some more recent developments, such as the prospect of ECB participation. Last night, Peter Spiegel from the Financial Times (@SpiegelPeter) published the German government’s [...]
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Europe
UK: Small Dip in GDP Equals a Big Drop in Confidence
In all likelihood, the 0.2% fall in GDP announced by the Office for National Statistics (ONS) last week will be revised away in time. There were, as there always are, some special factors. The second mildest autumn in more than 350 years produced a drop of over 4% in gas and electricity output, as well [...]
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Europe
Greek Bond Default Decision Tree
From Barclays, by way of Zero Hedge, we get this lovely decision tree showing possible outcomes for bondholders as Greece negotiates haircuts. Sigh. I miss the good old days when the insolvent said Fuck it!, declared bankruptcy, and left sorting it out to the BK judge or appointed special master. Hat tip ZH This post [...]
