Spain: Nothing and Everything. Details Examined.
Change of Attitude or One More Last Minute Plea Bargain? On a standalone basis, the deal announced yesterday does relatively little for Europe. It once again looks like a last ditch attempt to cobble together something to appease the markets. It relies on ESM which hasn’t yet been set up. It lends to the FROB […]
Welcome to Fantasy Island, I’m Your Host, Mr. Rajoy
With another full day ahead of this, things could change, but here is how I understand the situation. In the EFSF “guidelines” there was this little statement ii) Finance recapitalization of financial institutions through loans to governments including in non-programme countries It looks like the EFSF/ESM will lend money to something called the FROB which […]
The T Report: Central Banks, Spanish Banks, and 2 JPM Banks
Yesterday’s price action was about par for the course. Markets were higher on Chinese rate cut and that Merkel said something other than “austerity now”. Stocks dipped as Ben didn’t provide any immediate plans for QE. Then stocks rallied because no one had believed Ben was going to do much anyways. Finally, into the close, […]
The T Report: Killing Vampires, Werewolves, and Zombie Banks
We all know how to kill a vampire and a werewolf. For vampires you need to either trap them in sunlight or drive a wooden stake through their heart. For werewolves, you need a silver bullet. Or at least you did before the Twilight series came out. But killing a zombie bank isn’t necessarily as […]
The T Report 2: Hanging By a Thread and Inflation in Europe
The ECB press conference was an unadulterated disappointment. Absolutely nothing was given of any use. Some platitudes about watching and ready to act, but that’s about it. Why he chose to do nothing is a matter of speculation and seems to range from myopic, delusional, under orders from Merkel, or that Goldman was short and […]
The T Report: A Playbill for this Morning’s Central Bank Theater
Expectations for the ECB meeting seem high with U.S. futures back to 1,298 recovering almost two thirds of Friday’s drop. The range of possible outcomes from the ECB meeting seems exceptionally high. Some ideas being bantered out seem unrealistic because it isn’t actually the ECB’s mandate. Others have so many possible variations that the mere […]
The T Report: Schadenfreude Is a German Word
The market is relatively stable overnight and this morning. Yesterday traded in fits and starts with brief moments of concern that Friday’s sell-off would continue and brief moments of hope that Europe was going to do something to fix the situation in Europe. Trading was on light volume and liquidity seemed low as gaps of […]
The T Report: Is June 6th D-Day Once Again?
The ECB meeting on June the 6th seems key to me. Markets and economies are teetering across the globe. More and more people are coming to the conclusion that a Greek Exit would be catastrophic. Central banks won’t want to act as though they are panicking, but neither will they want to wait much longer […]
Why a Grexit Would Make Lehman Look Like Childs Play
Maybe I’m wrong, but every time I look at the possibility of a Greek exit right now I see it spiraling out of control and dragging down the entire global economy. I hear and read the arguments of why it is controllable and they just don’t seem credible. They either link a Greek devaluation […]
The T Report: The Non Jobs Report and the Myth of De-coupling
It is a global economy. Europe is a mess. China is struggling. Whatever strength the U.S. economy had earlier this year has now dissipated. The theory that somehow the U.S. can “decouple” is taking a serious beating, and the even less realistic view that Germany could “decouple” is also being torn to shreds. The […]
