I have always contagion on the negative terms as it has been evolving and spreading since the 2007.
Was observing the great Euro zone Yield convergence at Bloomberg from the FT dash-board -
…let’s not forget about one thing. We speak a lot about contagion when things go poorly, but I believe that there is also contagion, positive contagion, when things go well. And I think this is in play now. There is positive contagion. - Mario Draghi, ECB President
The Key Data Points
German 10-year Bund 5 bps higher; View full article »
Mario Monti, the Italian Prime Minister who spared the euro zone’s third-largest economy from all of Dante’s circles of hell, its sure destiny under his predecessor Silvio Berlusconi. It is another Mario – Mario Draghi, president of the European Central Bank.
Mr. Draghi, who was the Financial Times’s Person of the Year and lauded pretty much everywhere else (eclipsing Canada’s Mark Carney, the next Bank of England governor, if you can believe that) made two bold moves that removed the crisis’s rough edges.
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Economic relations in the euro zone amount to a game of chicken. Like car drivers aiming directly at one another, governments are challenging their counterparts to flinch first and give in. Unfortunately, the economic study of strategic behavior — also known as game theory — suggests that if you play chicken too many times, you will eventually crash the proverbial car.
Few months back I did a post Italy was in strong position according to the game theory View full article »
Here are the focus where the financial geeks talking about these days:
- Everyone focused on November handle for Greek restructuring, Spain bailout request. Spain will ask for implicit rate cap according to local press.
- EU Summit Thursday and Friday – need details on fiscal plan including enforcement to make this credible.
- Citi being taken well at first… so was JPM. View full article »
The SMP is dead! Long live the SMP!
OMT? Surely they could have just called it SMP2
What am I talking about?
It took the ECB a year of endless behind the scenes Machiavellian scheming to restart the SMP (Securities Markets Program) now View full article »
Hat’s off to Mario Draghi, who may actually be the smartest man in Europe. I know many people will not be fully agree with the action . But trust for the first time, the cup is half-full in the span of last 2 years, Europe has finally abandoned its hopeless strategy of mutual eurobonds backed by fiscal union (piling debt upon debt), and is moving toward the only possible solution: full-scale monetary rescue by the ECB.
Lets try to analyse the good part of it:
First of all, this action embodies fondest hope, View full article »
On Last Friday August 24th Merkel said that Greece was going to stay in the Euro. The New york Times reported ” Merkel Vows to help Greek Stay in Euro Zone”
The French President Hollande said the same thing on Sunday: The Wall street journal reported ” Hollande says Greece Must sta in Euro zone “
August 27 Merkel added that all of the folks who have a seat at the table just shut up about Greece : The Wall street reported “Merkel Cautions on Critism of Greece” ;- It’s Markel who should be cautious of what she says !!
To “fix” Greece, Greece View full article »
Has the Euro crisis taken a pause or it is just waiting for some reason to make in to the catastrophe. I started writing the blog in the early summers of 2008 with the intension of sharing views on the global financial markets and macroeconomics:- In the autumn of 2008, the banking sector collapsed with remarkable rapidity. It seemed that every weekend something remarkable happened, from the demise of Lehman Brothers, through View full article »
The European Central Bank is preparing to unleash its financial might and buy government bonds to help drive down borrowing costs in debt-ridden countries like Spain and Italy, caught in the grip of what president Mario Draghi called a “worsening crisis.”
Draghi urged leaders of the 17 countries that use the euro to use their bailout fund to take the same action, sending a clear message: Europe’s financial crisis requires more forceful remedies than leaders have so far been able to muster.
The move towards bond buying came a day after the Federal Reserve hinted it was leaning toward further action to stimulate U.S. growth, highlighting the View full article »
Yesterday MS published there Credit reports and they are more worried about the Macro environment.
The macro backdrop has worsened considerably since the end of June. Rising sovereign bond yields in Spain, weaker domestic and global economic data as well as the rising possibility that Greece once again fails to meet their bailout program criteria have all been shrugged off by credit investors. Since the end of June, the yield on the 10-year US .Treasury has fallen by 22bp and recently touched an all-time intra-day low of 1.379%. On the surface, that should tell you that risk assets have sold off. View full article »