The European Central Bank seems determined to make the euro crisis worse
Add a new risk to the continuing euro debt crisis: The European Central Bank itself. The bank’s one-year special liquidity facility runs out on June 30—and the bank has apparently decided not to renew the $543 billion program that supplied liquidity to the Euro Zone...Spain sells bonds–at least the market is still buying
$4.3 billion down. Just $62 billion to go. Yesterday, June 17, Spain sold $4.3 billion in bonds at auction at surprisingly low yields of 4.86% for the 10-year notes and 5.90% for the 30-year bond. Both rates were slightly below the yield on existing Spanish bonds in...Whoops–and so what happens to those European banks who fail their stress test?
Stress-testing European banks and then releasing the results is no cure for the euro debt crisis. Investors will be rightfully suspicious that bank regulators and sovereign governments are trying to sell them a bill of goods by setting up tests that banks are sure to...Bond buyers demand higher interest rates from Spain adding to the financial pressure
Spain took another step closer to becoming the next Greece yesterday, June 15. In case you’ve been on vacation for the last six months or so that’s not a good thing. An auction of 12- and 18-month Spanish government bill raised $6.4 billion but the interest rate on...Looming political crisis in Germany threatens the euro
The government of German Chancellor Angela Merkel faces a critical vote on June 30. If it loses the vote, the country will be plunged into new elections just as German opposition to the euro debt bailout is near a peak. There’s some chance that a government opposed to...Finally Moody's decides that Greek government bonds are junk
I’m sure the Greek government today is saying “Better never than late.” Moody’s finally got around to lowering its credit rating on Greece to junk today, June 14, just a month-and-a-half after Standard & Poor’s lowered the country’s credit rating to junk or...Return of Son of Bounce
You can tell a lot about now oversold a market is by how much it takes to create a bounce. The explanations for today’s rally that I’m seeing cite the big surge in Chinese exports (For more on that news, see my post...Somebody in Hungary is lying and the euro pays the price
Now it’s Hungary that’s talking about default? Why does Europe remind me so much of the amusement park game Whac-a-Mole these days? This morning, June 4, the government of Prime Minister Viktor Orban, said that the economy is in a very grave situation. “I don’t...Worry over shaky Euro banks pushes up interest rates, threatening the global economic recovery
The euro debt crisis is moving from the euro to European banks. Dollar LIBOR, the London Interbank Offered Rate that banks pay for short-term loans in dollars, climbed to 0.51% today. That’s the highest level since July 16, 2009. A rising LIBOR reflects increasing...The euro debt crisis is lowering interest rates in the U.S. and slowing inflation in emerging economies
In Europe the euro debt crisis is nothing but bad news. Riots in Athens. Strikes in Spain. Shrinking pay checks. 20% unemployment. Rising taxes. Cuts to government services. Hard times for as far as the eye can see. In the U.S? Sure, the crisis has sent a shiver...Why the euro is headed to $1.10–politicians see it's the easy way out of the euro debt crisis
Why the endless downward pressure on the euro? Despite a $1 trillion bailout euro debt rescue plan, despite tradition-smashing euro bond buying by the European Central Bank, despite expressions of support from the Euro Zone’s political and financial leaders, the...Euro resumes its decline taking some steam out of markets at the open
The euro is like a patient who has stabilized, but who goes back into decline whenever the doctors try to remove life support. The euro did strengthen immediately after Euro Zone politicians announced their $1 trillion rescue plan and central banks in the 16 euro...A little–just a bit–of good economic news from Europe
As good news goes, today’s announcement of first quarter GDP growth in the Euro Zone economies isn’t going to produce dancing in the streets. But good news has been hard to come by in Europe recently so even the smallest positive change is welcome. The economies of...$1 trillion in euro bailout plan enough to impress the markets today
Global financial markets are cheering the European Union’s $1 trillion rescue plan. (Cynics might call it a $1 trillion bribe to the markets, but I’d never join in suggesting that.) The goal was to produce a plan that awed the markets with its sheer size. For a day at...Don't forget about the euro: Today's stock plunge could have been triggered by the day's big currency moves
Maybe technical levels of stock indexes did turn a bad day for stocks into a heart-in-your-mouth plunge, but stocks prices aren’t the only thing that might have triggered today’s 700-point drop in the Dow Jones Industrial Average from 2:30 to 2:46 p.m. ET. There’s a...Spanish interest rates climb as the country takes another step toward crisis
You can breathe a sigh of relief that Spain managed to sell a new debt issue at all, but the soaring interest rate the country had to promise buyers is a sign that worries that Spain is headed straight toward a Greek-style debt crisis are all too justified....Europe down again; lower open in New York likely
It doesn’t look good this morning. The S&P 500 futures are pointing to a down open in New York. The euro is down further against the dollar in trading in Europe, hitting $1.2935, a 13-month low. European stock markets are down as well with London dropping almost...A falling euro says the crisis in Europe isn't over
Watch the euro. Yesterday while stocks in Europe and around the world rallied in relief on news of a $146 billion bailout for Greece, a falling euro signaled continued skepticism that the crisis was over. That skepticism seems to be on the rise this morning. As of...Greek crisis postponed, it's time for the Spanish crisis to move front and center
Assuming that the $146 billion bailout of Greece goes ahead as planned, investors can forget about a Greek crisis for about three years. And start to focus on Spain. The debt problem there looks like it’s developing along exactly the same path as the Greek debt...Go figure: Markets rally on news that Euro leaders will have a plan to bailout Greece "soon"
Sure glad that’s over. Suddenly Monday’s downgrade by Standard & Poor’s of Greece’s sovereign debt to junk doesn’t matter anymore. European stock markets have hauled out the rally monkey today on news that—well, on news that discussions on an aid package for...How much could it cost to bailout Greece, Portugal, and Spain? Would you believe $630 billion?
Economists and investment banks are starting to put some concrete numbers on the Greek—and Spanish and Portuguese—debt crisis. And they’re large. To me shockingly large. Kenneth Rogoff, a former economist for the IMF (International Monetary Fund) turned Harvard...Stocks sold off today for clear reasons–here's how to figure out how long the selling might last
We all know what happened today. Investors sold financials on worries that troubles at Goldman Sachs were getting worse and looked more and more likely to spread to other financial companies. The Greek debt crisis, which had looked ready to fade into the background,...How bad is the Greek crisis? 14% bad
The yield on 10-year Greek government bonds briefly hit 14% yesterday, April 26, before finishing at just 13.52%. That was an increase of 3.4 percentage points on the day. (Just for reference the total yield on 10-year U.S. Treasuries is 3.75%.) So much for the...Could Greece turn into another Lehman and take down the world financial system? I'd say No.
The Greek deficit crisis could turn into a Lehman-type event capable of freezing the financial markets, according to a report today from Deutsche Bank. If Greece acts to restructure its debt at the expense of current bond holders, it could cause financial markets to...The Greek debt crisis is back as deficit numbers actually get worse
Greece: It’s not so bad that it can’t get worse. Not exactly the slogan I’d use to rally investors to buy the bonds of a country overwhelmed with debt and deficits, but it’s one that fits the news out of Europe this morning, April 22. According to the statistics...Loans will save Greece (for 2010) but bring a Spanish crisis closer
It’s hard to see how this deal fixes the Greek crisis. Postpones the day of reckoning, sure. News that members of the European Monetary Union have agreed to provide up to $41 billion in loans to Greece over the next year will almost certainly allow the country to...The Greek crisis goes on and on an on–with no light at the end of the tunnel
“A default is not an issue for Greece,” Jean-Claude Trichet, head of the European Central Bank, told a press conference in Frankfurt today, April 8. The bond market begs to differ. Greek bonds sold off today bringing the yield premium to benchmark German bonds to...Grim budget fairy tales from Europe
The European Commission took Germany, France, Italy, Spain, and the United Kingdom out back to the woodshed for a financial thrashing yesterday, March 17. Now let’s see if the bond market was paying attention. The bureaucrats in Brussels essentially called the...Get ready for a re-run of the Greek budget crisis
I don’t want to rain on anyone’s parade, but we all know that the Greek budget crisis hasn’t been resolved, right? It’s merely been postponed until April and May. That’s when Greece has to refinance $27 billion in debt. (Doesn’t seem like much? Well, if you scaled...Jim’s Daily Email Alerts:
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