asterisk2a + contagion   57

Italy’s €360 billion referendum – POLITICO
Italy’s banking system is staggering under €360 billion in bad loans. Almost any outcome that destabilizes Italian politics would send tremors through the country’s rickety financial system. While the long-term consequences could be dramatic — in a worse case scenario perhaps leading to the collapse of the eurozone — the first victims could be efforts to rescue two of Italy’s largest lenders.
non-performing  NPL  bad  bank  Italy  Referendum  Renzi  contagion  European  Union  systemicrisk  sovereign  debt  crisis  GFC  economic  history  recession  recovery  Austerity  ECB  Banking  Supervision  MarioDraghi  Greece  Spain  Portugal  PIGS  UK  exposure  bailout  bail-in  bailin  recapitalization  recapitalisation 
november 2016 by asterisk2a
Deutsche Bank threat has grown - BBC News
Last month the IMF described it as the world's most dangerous bank as it is the weakest link in the chain of globally significant financial institutions.
Deutsche  Bank  contagion 
september 2016 by asterisk2a
The Deutsche Bank crisis could take Angela Merkel down – and the Euro
Over the weekend, the German Chancellor Angela Merkel waded into the mess, briefing that there could be no government bail-out of the bank. [...] If it was in trouble, it was on its own. [... would be another example of socialism for the rich, and the poor must suffer waht they must - varoufakis ]

But hold on. Surely that is an extra-ordinary decision? If the German government does not stand behind the bank, then inevitably all its counter-parties – the other banks and institutions it deals with – are going to start feeling very nervous about trading with it.
Angela  Merkel  bailout  Deutsche  Bank  Italy  contagion  TBTF  systemic  risk  investment  banking  Germany  Bundesbank  ECB  AfD  CDU  CSU  SPD  far-right  right-wing  austerity  Commerzbank  bail-in  bailin 
september 2016 by asterisk2a
IMF's own watchdog criticises its handling of eurozone crisis
Fund was over-optimistic, failed to spot scale of problem and gave impression it was treating Europe differently, says report
Troika  PIGS  Greece  Grexit  Yanis  Varoufakis  IMF  austerity  economic  history  Germany  Angela  Merkel  Wolfgang  Schäuble  liberal  economic  reform  ChristineLagarde  zombie  bank  zombie  banks  contagion  bank  bailout  sovereign  debt  crisis  European  Union 
july 2016 by asterisk2a
EU finance ministers get tough with Italian bank trying for third bailout
EU rules forbid troubled Tuscan bank Monte dei Paschi from receiving state aid, but its collapse would cause a political crisis for prime minister Matteo Renzi [...] a move that would need Brussels to break new rules designed to prevent such taxpayer bailouts after the 2008 global financial crisis. [... italy had a triple dip recession from 2008/9 counting ] //&! //&! Banks missold products again, in part - //&! 360mrdEuro NPL &! &! &! Bad Bank #2 to be set-up - [...] technical analysis -
Matteo  Renzi  Angela  Merkel  Wolfgang  Schäuble  European  Bank  Supervision  bailout  bailin  Italy  zombie  zombie  banks  non-performing  loan  austerity  recession  Germany  Deutsche  Bank  contagion  contamination  systemic  risk  systemicrisk  systemrelevant  systemrelevanz  BaFin  ECB  Basel  III  Basel3  stresstest  Jeroen  Dijsselbloem  sovereign  debt  crisis  economic  history 
july 2016 by asterisk2a
"Deutsche Bank Poses The Greatest Risk To The Global Financial System": IMF
via Keister Report - // a Italian banking crisis could topple them. that is why they (their economist) called for a EU bank bailout (shore up). //&! IMF Warns Of "Global Contagion" From Italy's Bank Crisis; Forecasts Two-Decade Long Recession - - [...] "Unless asset quality and profitability problems are addressed in a timely manner, lingering problems of weaker banks can eventually weigh on the rest of the system," //&! //&! Analyst Warns Deutsche Bank's Problems May Now Be "Insurmountable" - - [...] we believe DBK is still over 40x levered. [...] Seeking outside capital is also likely to be difficult as management would likely find it hard to offer any type of return on new capital invested. //&! its known balance sheet - - 1.74 trillion balance sheet!
Italy  Germany  derivatives  Deutsche  Bank  BuBa  BaFin  Wolfgang  Schäuble  Angela  Merkel  investment  banking  systemic  risk  systemicrisk  systemrelevant  systemrelevanz  European  Bank  Supervision  stresstest  contagion  repo  trust  sovereign  debt  crisis  PIGS  Greece  Brexit  non-performing  loan  zombie  banks  zombie  austerity  secular  stagnation  recession  ECB  MarioDraghi  ZIRP  NIRP  QE  hunt  for  yield  asset  allocation  distortion  OMT  LTRO  Basel  III  Basel3  leverage  banking  union  Bank  Oversight  banking  crisis  banking  system  interbank  lending  overnight  deposit  facility 
july 2016 by asterisk2a
Brexit und Italien-Krise: Euro-Gruppen-Chef schließt neue Bankenrettung aus
[ EXPOSURE TO ITALY BANKS ] Euro-Gruppen-Chef Jeroen Dijsselbloem lehnt ein neues Bankenrettungsprogramm ab. "Die Probleme müssen in den Banken geregelt werden", sagte der Niederländer beim Treffen der Eurofinanzminister am Montag in Brüssel. Die Einfachheit, mit der einige Banker mehr öffentliche Gelder forderten, um ihre Probleme zu lösen, sei problematisch. "Das muss ein Ende haben." // - Der Kursrückgang bei Bankaktien sei nur das Symptom eines viel größeren Problems, nämlich einer fatalen Kombination aus schwachem Wachstum, hohen Staatsschulden und einer Nähe zur gefährlichen Deflation.
contagion  European  integration  banking  union  Wolfgang  Schäuble  Italy  Germany  repo  Brexit  secular  stagnation  austerity  ECB  European  bank  bailout  systemic  risk  systemicrisk  systemrelevant  systemrelevanz  European  Supervision  reflate  reflation  bank  restructuring  Oversight  MarioDraghi  Mark  Carney  trust  interbank  lending  interbank  market  overnight  deposit  facility  deflation  deflationary  sovereign  debt  crisis  PIGS  Greece  Angela  Merkel  UK  economic  history 
july 2016 by asterisk2a
South Africa's economy 'in crisis' - BBC News
He conceded the economy was struggling with shrinking growth, 25% unemployment, and widespread poverty. The South African currency, the rand, which has halved over the past five years, fell after the speech. It dropped 2.25% to make one rand worth around $0.0639. In a briefing ahead of the Budget, Mr Gordhan said: "There is no doubt about the fact that we are in crisis." The measures announced in Parliament were aimed at stopping the country falling into recession and to appease the rating agencies who have threatened to downgrade South Africa to junk status, which would raise borrowing costs for the country.
South  Africa  BRIC  2016  China  Africa  economic  history  contagion  credit  bubble 
february 2016 by asterisk2a
China: Is it in the Midst of a Hard Landing? - YouTube
Gordon Chang, author of "The Coming Collapse of China," discusses the outlook for China's economy with Bloomberg's Joe Weisenthal and Alix Steel on "What'd You Miss?" // 1trn in reserves to support yuan, will need to liquidate its serserves - bond and fx // currently there is no backstop // mal-investment // time has run out since their Put post-2009 to retool economy and social safety net and health care // will be bad pull on western world, deflation, // "1930's style crash" // they have no tool left, no backstop. //
book  China  credit  bubble  QE  ZIRP  NIRP  PBOC  liquidity  trap  asset  allocation  speculative  bubbles  asset  bubble  equity  bubble  faultlines  structural  imbalance  Impediments  2015  capital-flight  Yuan  RMB  economic  growth  contagion  global  economy  bond  bubble  property  bubble  hubris  irrational  exuberance  panic  BRIC  Developing  World  western  deflationary  deflation  economic  history  fiscal  policy  monetary  policy 
august 2015 by asterisk2a
Forget China - Oil Price Is Main Driver Of Market Turmoil | Zero Hedge
For the moment we are expecting oil producers to start to minimize their loses by producing even more oil. The oil crisis has just begun. // // &! DeMark compares China to the start of the Great Depression in the US, and when applying the 38.2 Fib retracement levels which have been breached, now expects even more pain for Chinese stocks - // // &! THINGS WERE TOO FAR AWAY FROM REALITY - Many indicators confirm that last week was remarkable and historic. Record after record was set, including the largest daily move, the biggest intra-day reversal and the most harrowing intra-day air pocket. - - legitimate questions about the robustness of the global economy [ contagion & overshoot - hubris and panic alike, good news gets washed down w bad news, extreme volatility still break markets, contagion still real & ppl are leveraged again (were complacent, institutional! investors!) ] market craziness. [ irrational exuberance that were equities ]. &!
Oil  price  energy  price  OPEC  2015  China  commodities  global  trade  global  economy  western  world  developed  world  BRIC  credit  bubble  ZIRP  NIRP  QE  PBOC  economic  slowdown  reflate  reflation  asset  allocation  asset  bubble  hunt  for  yield  liquidity  trap  Fed  BOE  BOJ  ECB  hot-money  currency-war  currency  debasement  currency  war  economic  history  debt  monetisation  debt  monetization  contagion  VIX  volatility  uncertainty  unknown  unkown  unintended  consequences  margin  trading  deleveraging  Greed  Wall  Street  profit  maximisation  shareholder  value  share  buyback  hubris  panic  behavioral  finance  behavioral  economics  irrational  exuberance  economic  growth  monetary  policy  monetary  stimulus  unconventional  monetary  policy  zombie  banks  business  confidence  consumer  confidence  recovery  speculative  bubbles  speculative  speculation  equity  bubble  bond  bubble  property  bubble  economic  damage 
august 2015 by asterisk2a
Marc Faber: The Global Economy Is Entering An Epic Slump - YouTube
could see liquidity squeeze. have global credit bubble. Chinas own (2009-Put) did pop, probably just this Summer '15! // may lead 2 zombie banks, if they werent already if it werent 4 PBOC with huge amounts of NPL also within shadow banking system. policy response could be 2 double down on usual mis-guided measures 2 keep status quo. extend & pretend. // World is still flush, thus currently moderate signs of impact of China slowdown - - will take time. // &! leverage / margin trading was/is at new highs comparable to 2007 on both side of Pacific (USA/China) - - so the hurt was/will be big! BIG! underwater. talk abt manufactured balance sheet recession // &! Willem Buiter: Only "Helicopter Money" Can Save The World Now - - major blast of fiscal spending by PBOC in some months when the hurt cant be ignored any more. Will wait too long, will drag everyone else down. & &! - Jim Rogers.
liquidity  trap  credit  bubble  2015  China  private  debt  household  debt  PBOC  equity  bubble  property  bubble  hunt  for  yield  speculative  bubbles  asset  allocation  asset  bubble  bond  bubble  distortion  margin  trading  NPL  zombie  banks  banking  crisis  shadow  banking  leverage  underwater  contagion  USA  UK  Europe  developed  world  IMF  OECD  QE  currency-war  currency  debasement  currency  war  fiscal  stimulus  fiscal  policy  monetary  policy  Jim  Rogers 
august 2015 by asterisk2a
Will the Next Recession Be Made in China? - Bloomberg Business
When China sneezes, the world just might catch a cold [...] The difference between now and then is that a lot of developing nations and global markets have braced themselves against the risks of a currency crisis, making a full-scale Asian Contagion unlikely. [...] “In a nutshell, no one can or should rule out a crisis, but we believe that the risk has fallen from a few years ago.” [...] Financial markets depend on good information. When it’s lacking, investors flail. They assume the best when they’re bullish and the worst when fear gets the best of them. That helps explain the eruption over China, a nation that remains opaque despite having the world’s second-biggest economy. Facts as basic as its GDP are hard to pin down: Officially it grew at 7 percent in the first and second quarters—suspiciously, precisely the rate Li predicted for 2015. Some outsiders put growth at closer to 5 percent based on data such as electricity consumption and rail cargo.
global  economy  China  global  trade  Europe  USA  globalization  globalisation  borderless  flat  world  contagion  economic  history  2015  recovery  Taper  ZIRP  NIRP  QE  distortion  faultlines  structural  imbalance  global  imbalances  Impediments  PBOC  Fed  BOE  BOJ  Abenomics  hunt  for  yield  reflate  reflation  asset  allocation  asset  bubble  speculative  bubbles  speculative  speculation  equity  bubble  bond  bubble  property  bubble  Debt  Super  Cycle 
august 2015 by asterisk2a
On Second Thought, China Slowdown Will Hit Global-Growth Outlook - Bloomberg Business
Fitch Ratings said in a note Wednesday that while pessimism on China’s short-term outlook is “overdone,” there is still the potential for a “prolonged period of lower growth,” with expansion well below 7 percent. [...] Things are looking gloomier elsewhere. Brazil’s economy, Latin America’s largest, contracted 1.9 percent in the second quarter from the previous period, the government reported on Friday. That’s worse than the 1.7 percent median estimate of economists surveyed by Bloomberg. [...] “The basic assumptions about global growth are suffering, and the epicenter is China,” // lots of hot money on the hunt for yield found its way to emerging market and developing market! period, didn't stay in UK, US, Europe. Period. That is something policy makers accepted. financial market is global, not local. BOE ZIRP NIRP QE can not be contained within UK. Period. Same with Chinese newly minted property/paper millionaires put their money in London & else. LatAm into Miami and Co property.
global  economy  BRIC  global  trade  deflationary  deflation  western  world  UK  USA  Europe  China  Russia  India  2015  hunt  for  yield  hot-money  ZIRP  NIRP  QE  reflate  reflation  emerging  middle  class  GFC  monetary  policy  asset  allocation  asset  bubble  equity  bubble  speculative  bubbles  speculative  speculation  unintended  consequences  complexity  globalization  global  imbalances  globalisation  faultlines  structural  imbalance  Impediments  secular  stagnation  economic  history  BOE  Fed  BOJ  Abenomics  ECB  zombie  banks  monetary  theory  contagion  financial  repression  financial  market  bond  bubble  property  bubble  PBOC 
august 2015 by asterisk2a
Credit Booms & Credit Busts - YouTube
// financial cycle twice as long as business cycles (which is on top, like an inverted pyramid). // financial markets are not self-stabilising // better make policy on caution, that if you don't act you will cause more long-lasting economic damage by curbing one obvious bubble not in (ie uk property bubble - people who have difficulty serving their interest payment) // QE does not facilitate loan growth in times of balance sheet recession - Richard Koo // QE is reflationary and currency war, downside size unknown - look Richard Koo, state has to pick-up shortfall of demand // // There is now a growing consensus among policymakers and academics that a key element to improve safeguards against financial instability is to strengthen the “macroprudential” orientation of regulatory and supervisory frameworks. [Dr. Claudio Borio @ BIS], one could even say that “we are all macroprudentialists now”. And yet, a decade ago, the term was hardly used. What does it mean?
BIS  equity  bubble  speculative  bubbles  credit  bubble  asset  bubble  property  bubble  macroprudential  policy  macroeconomic  policy  ZIRP  NIRP  QE  Taper  unintended  consequences  unknown  unkown  complexity  bond  bubble  Student  Loan  debt  debt  regulation  oversight  governance  BOE  simplicity  incomplete  information  academia  academics  economist  behavioral  economics  behavioral  finance  economic  history  systemicrisk  EuropeanSystemicRiskBoard  financial  market  sustainable  sustainability  mortgage  market  UK  USA  China  speculative  speculation  contagion  monetary  policy  unconventional  monetary  policy  monetary  theory  modern  monetary  theory  credit  boom  financial  cycle  Makers  policy  folly  policy  error  Career  Politicians  short-term  thinking  short-term  view  political  economy  political  theory  centralbanks  economic  damage  economic  model  Richard  Koo  animal  spirit  austerity  monetary  transmission  mechanism  robertshiller  Robert  Shiller  ideology  dogma  sovereign  debt  crisis  populism  corporate  state  manufactured  consent  Lügenpresse  BOJ  Fed  currency  war  currency  debasement  ECB  negative  real  interest  rate  Japan  hunt  for  yield  irrational  exuberance 
july 2015 by asterisk2a
Greece risk pales against China - YouTube
China's own equity bubble. Money taken out of property (domestic and world wide), into equities.
Grexit  China  speculative  bubbles  speculative  speculation  equity  bubble  contagion  economic  growth  economic  model  2015 
july 2015 by asterisk2a
Greek economy close to collapse as food and medicine run short | World news | The Guardian
Banks said they had a €1bn cash buffer to see them through the weekend – equal to just €90 (£64) a head for the 11 million-strong population – and would require immediate help from the European Central Bank on Monday whatever the result of the referendum, in which the two sides are running neck and neck. Alexis Tsipras, Greece’s prime minister, was fighting for his political life on Friday night, using a rally to say that a no vote would enable him to negotiate a reform-for-debt-relief deal with the country’s creditors. [ Greece needs debt jubilee (and Allies urged also to forgo reparations) like post-WW2/Nazi Germany got that enabled it to economically succeed, but Greece (and its people) is not seen as too big to fail and not critical for European stability. A 20 year debt repayment pause that IMF last week brought in, is not enough. It is just a delay. It's economically not sound. Just opportunism to show to the public 'we do something.' ]
debt  jubilee  Germany  history  WW2  haircut  sustainable  sustainability  sovereign  debt  crisis  Grexit  PIGS  contagion  unintended  consequences  unknown  unkown  monetary  union  Leadership  IMF  ChristineLagarde  Angela  Merkel  Jean-Claude  Juncker  Wolfgang  Schäuble  Career  Politicians  European  solidarity  Gesellschaft  Greece  debt  bubble  debt  restructuring  Opportunism  opportunist  Wirtschaftswunder  economic  history  zombie  banks  bailout  Troika  EFSF  Syriza  ECB  MarioDraghi  ELA  austerity  ideology 
july 2015 by asterisk2a
Griechenland vor dem Referendum: Banken sind Herd der Krise - SPIEGEL ONLINE
Angesichts dieser Lage würden rationale Menschen den Schaden begrenzen wollen. Die einzige Möglichkeit, die es jetzt noch gibt, wäre ein verhandelter Schuldenschnitt für Griechenland ohne neues Programm, aber mit einer Refinanzierung der griechischen Banken. Mit anderen Worten: Wir müssten die Schmach über uns ergehen lassen, dass wir einem Teilverzicht unserer Forderungen zustimmen und gleichzeitig einen weiteren Kredit vergeben. So irrsinnig, wie sich das anhört, so sinnvoll wäre ein solcher Schritt aus deutscher Sicht. Nicht aus Mitleid oder Verantwortung. Sondern aus Eigennutz. Die Betonung hier liegt auf Teil-Verzicht. // // in the end it was a bank bailout through the backdoor sold to the people as Greece Bailout, the money went to the EU banks. period. so sell it as it is, the fucking pig. isn't politics about compromise? >> THUS LOL by Merkel call for more compromise - &! Merkel and Junker is at fault for putting them before Europe at large -
haircut  debt  jubilee  Grexit  Greece  PIGS  contagion  EFSF  IMF  Angela  Merkel  Wolfgang  Schäuble  ChristineLagarde  Career  Politicians  Leadership  unintended  consequences  2015  political  error  political  economy  European  Union  political  folly  policy  error  policy  folly  short-term  thinking  short-term  view  solidarity  Podemos  Syriza  Gesellschaft  zombie  banks  banking  bank  crisis  banking  crisis  stresstest  EuropeanSystemicRiskBoard  ECB  MarioDraghi  Jens  Weidmann  sovereign  debt  crisis  default  default  scenario 
june 2015 by asterisk2a
ECB Re-Bluffs To Cyprus Bluff, Is "Prepared To Let Cyprus Go" | Zero Hedge
And to think: so much pain and confusion over what CNBC can't stop repeating is nothing but a tiny, little country. Tiny... maybe. But the precedent it will set may well be of Archduke Ferdinandian size.
contagion  OMT  monetary  policy  monetary  theory  modern  monetary  theory  MarioDraghi  unintended  consequences  sovereign  debt  crisis  Euro  Troika  PIIGS  banking  crisis  ECB  Cyprus  bank  crisis  zombi  banks  bailout  IMF 
march 2013 by asterisk2a
Next: Capital Controls | Zero Hedge
That is precisely the Pandora's box that Europe has now opened, and which it is scrambling to close. How? With the dreaded "contingency plans", among which are such last ditch efforts as capital controls, including "imposing limits on daily withdrawals from bank accounts; capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and introducing border checks to cap the amount of cash leaving in the country," most recently utilized in the banana-est of republics such as Argentina. + LEVY ON DEPOSITS "This is an unprecedented assault on individual property rights and every individual in the developed world should take notice, and far from stabilising the eurozone, the bail-out likely heightens contagion risk across the EU."
capital-controls  contagion  ESM  trust  economic  history  Europe  confidence  unintended  consequences  trustagent  PIIGS  Cyprus  politcal  folly  bankrun  capital-flight  policy  folly  IMF  bailout 
march 2013 by asterisk2a
Zypern-Krise: Wie sich das Land seinen Banken ausgeliefert hat - SPIEGEL ONLINE
Zypern steht vor dem Staatsbankrott, schuld sind vor allem die Banken. Jahrelang profitierte das Land von seinem überdimensionierten Finanzsektor, nun müssten die beiden größten Institute dringend abgewickelt werden. Doch die Regierung in Nikosia schreckt davor zurück - aus einem einzigen Grund. [...] Die Banken sind das eigentliche Problem Zyperns. Völlig überdimensioniert, vollgepumpt mit griechischen Staatsanleihen, de facto schon jetzt pleite. >> " Pimco glaube, dass es sich bei der Zwangsabgabe nicht nur um einen politischen Fehler der Euro-Retter handle. Stattdessen zeige das Hilfspaket, dass "der Euro weit davon entfernt ist, eine perfekte Reservewährung zu sein". >
PIMCO  contagion  ESM  Political  Folly  trust  economic  history  Europe  confidence  unintended  consequences  zombie  banks  Laiki  Bank  sovereign  debt  crisis  cyprus  trustagent  BIS  PIIGS  banking  crisis  ECB  bankruptcy  Bank  of  crisis  IMF  bailout  policy 
march 2013 by asterisk2a
"Did Somebody Repeal The Laws Of Mathematics?" | ZeroHedge
Back then (2010), the general opinion was that if the contagion spread to Spain the game was over because there wasn’t enough money with which to bail out an economy the size of The Kingdom of Spain. I’m not sure exactly what happened— maybe I wasn’t paying attention—but suddenly, almost two years on and in an environment where even the rich nations of Europe are seeing an undeniable slide towards recession, there is no talk about Spain being ‘too-big-to-bail’ anymore.


Looking at it all :: the market (Spanish gov showed them some slides ...) assumes that Spain will get out of recession by 2013 with pa growth of 1.6% as internal demand will rise again.

*make one speechless*
Germany  bipolar  disorder  Stockholm  Syndrome  ESM  SMP  EFSF  Italy  toobigtofail  policy  folly  policy  error  contagion  2010  austerity  greatrecession  2012  PIIGS  Spain  MarioDraghi  ECB  centralbanks  unintended  consequences  politics  Europe  sovereign  debt  crisis 
august 2012 by asterisk2a
Konjunktur und Geschäftszahlen: Die Krise erreicht Deutschland - SPIEGEL ONLINE
Schwache Unternehmenszahlen
Krise erreicht die Deutschen

Ob Siemens, BASF oder die Bahn - die Krise trifft Deutschlands Konzerne. Bisher machen die meisten Unternehmen zwar noch Gewinne. Doch die Aussichten verschlechtern sich rapide. Geht das deutsche Wirtschaftswunder zu Ende? Und wie stark bekommen die Arbeitnehmer die Krise zu spüren?

- BASF - Chemical Company = big business indicator, Q2 2012 profits -16%
Europe  contagion  2012  sovereign  debt  crisis  PIIGS  Germany  greatrecession  economic  cycle  business  cycle 
july 2012 by asterisk2a
Draghi May Enter Twilight Zone Where Fed Fears to Tread - Bloomberg
European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve.

Once an obstacle for policy makers because it risks hurting the money markets they’re trying to revive, cutting the deposit rate from 0.25 percent is no longer a taboo, two euro-area central bank officials said on June 15.
“The European recession is worsening, the ECB has to do more,” said Julian Callow, chief European economist at Barclays Capital in London, who forecasts rates will be cut at the ECB’s next policy meeting on July 5. “A negative deposit rate is something they need to consider but taking it to zero as a first step is more likely.”

- bc of europes banking problem, contagion, and bank run in the periphery ... NIRP is considered - negative interest rate policy.
- ZIRP changed alot as did QE
- NIRP would make big waves in asset allocation

!!! But does monetary easing help banks and consumers clean up NPL / balance sheet? No!
NPL  economic-thought  economic  history  economic  model  economics  demand  balance  sheet  recession  richardkoo  debtoverhang  monetary  theory  creditcunch  unintended  consequences  psychology  contagion  GFC  greatrecession  2012  Fed  ECB  PIIGS  EMU  bank  crisis  bankrun  System  monetary  policy  ZIRP  NIRP 
june 2012 by asterisk2a
King adds to gloom over UK economy -
Sir Mervyn King and other Bank of England policy makers warned MPs on Tuesday that the economic situation had deteriorated so severely that they had ripped-up their forecasts of six weeks’ ago.

In some of his bleakest remarks to date, coming soon after weak public finance figures, he cautioned the public not to think Britain was even half-way through the crisis, which started almost five years ago.

Mr King said, “I have no idea what is going to happen in the euro area”.

“It is impossible to imagine a situation in which you just do not know what the situation will be in a part of the world that is close to you and is half of your trade. And that makes it impossible to engage in any sensible forecasting.”
economy  monetary  policy  ZIRP  QE  BOE  politics  policy  folly  policy  error  uncertainty  forecast  academics  academia  economics  economic  history  economic-thought  economic  model  contagion  EMU  Europe  greatrecession  sovereign  debt  crisis  GFC  UK  MervynKing 
june 2012 by asterisk2a
BBC News - Cyprus to ask for bailout from eurozone partners
The country needs to find about 1.8bn euros over the next few days to recapitalise its second largest lender, Cyprus Popular Bank.


The country has already borrowed 2.5bn euros from Russia, whose business people are important customers of Cyprus's relatively large offshore financial sector which offers low tax rates.

The BBC's chief economics correspondent Hugh Pym described Cyprus' problems as "classic contagion".


Credit ratings agency Fitch said the country, which has a population of one million, would need 4bn euros to support its banks, the equivalent of almost a quarter of its GDP, or economic output, last year.
banking  crisis  bailout  contagion  sovereign  debt  crisis  PIIGS  2012  Cyprus 
june 2012 by asterisk2a
BOJ Tells Fed Credit Rules May Hinder Japan Monetary Policy - Bloomberg
The Fed plans to limit financial firms with at least $500 billion in assets from having credit risk to any other exceeding 10 percent of its regulatory capital plus excess loan-loss reserves. That is stricter than a 25 percent restriction that’s applied more broadly to banks in the Dodd-Frank financial- overhaul law.
regulation  oversight  2012  contagion  GFC  Dodd-Frank  Fed 
may 2012 by asterisk2a
Staatsbankrott: Was eine Griechen-Pleite jeden Bundesbürger kosten würde - SPIEGEL ONLINE - Nachrichten - Wirtschaft
Deutschland und damit jeder einzelne Steuerzahler haftet für vier Risiken:

für die Zahlungen aus dem ersten Rettungspaket für Griechenland,
für die griechischen Staatsanleihen, die bei der Europäische Zentralbank (EZB) liegen,
ferner für die griechischen Staatsanleihen im Besitz von staatlichen deutschen Banken
und schließlich für Ausfälle im sogenannten Target2-System.

[...] "Wenn Griechenland aus dem Euro austritt und seine Target-Salden nicht bedient, müsste Deutschland gemäß seinem Anteil von rund 27 Prozent an der EZB die Verluste tragen." Im schlimmsten Fall wären das geschätzte 27 Milliarden Euro. Westermann: "Die großen Risiken im Target-System sind meiner Meinung nach der Grund, dass Griechenland von den Euro-Ländern nicht fallengelassen wird."
sovereign  debt  crisis  PIIGS  contagion  Germany  ECB  EFSF  target2-system  2012  default  scenario  default  greece 
february 2012 by asterisk2a
Capturing the ECB - Joseph E. Stiglitz - Project Syndicate
Moreover, “innovation” in financial markets has made it possible for securities owners to be insured, meaning that they have a seat at the table, but no “skin in the game.” They do have interests: they want to collect on their insurance, and that means that the restructuring must be a “credit event” – tantamount to a default. The ECB’s insistence on “voluntary” restructuring – that is, avoidance of a credit event – has placed the two sides at loggerheads. The irony is that the regulators have allowed the creation of this dysfunctional system.

.... involuntary restructuring vs voluntary restructuring

The ECB’s behavior should not be surprising: as we have seen elsewhere, institutions that are not democratically accountable tend to be captured by special interests. That was true before 2008; unfortunately for Europe – and for the global economy – the problem has not been adequately addressed since then.
lobby  accountability  democracy  politics  Europe  contagion  credit  event  ISDA  CDS  restructuring  regulation  banking  transparency  2012  default  Greece  ECB 
february 2012 by asterisk2a
Sarkozy Raises Taxes to Meet Deficit Target - Bloomberg
French President Nicolas Sarkozy’s government announced tax increases on the highest earners, capital gains, alcohol, tobacco, and sugared drinks to meet deficit targets and avoid the worst of the euro debt crisis.Prime Minister Francois Fillon announced 12 billion euros ($17 billion) of measures in 2011 and 2012 and cut economic growth forecasts, saying the euro region’s second-largest economy will expand by 1.75 percent in each year. He said France’s deficit would be 4.5 percent of gross domestic product in 2012, when Sarkozy seeks re-election, beating the target.“We have passed the threshold of tolerance on debt,” Fillon told reporters at a briefing in Paris. Yet, “today’s policies are not emergency austerity measures.”
austerity  sarkozy  2011  2012  France  PIIGS  contagion  sovereign  debt  crisis 
august 2011 by asterisk2a
Greek Bank Run Continues Unabated: 3.8 Billion In June Outflows Bring Total Deposit Base To Mid-2007 Levels | ZeroHedge
Who could have possibly imagined that in the month of June, Greek banks would see yet another major deposit outflow. Alas, according to just released NBG data, June deposit outflows by households and corporates amounted to €3.8 billion, bringing the total down to just €188 billion. This is a whopping 20% decline in total Greek bank deposits since January 2010. It also means that each increasing outflow merely plants the seeds for even more outflows in the next month as less and less confidence (and cash) remains in Greek banks.
capital-controls  Greece  2011  PIIGS  banking  banks  contagion  confidence  systemicrisk  politics  policy  Europe  bailout  EFSF  ECB 
august 2011 by asterisk2a
European Central Bank must go nuclear to save Europe - Telegraph
The ECB should not 'sterilize' purchases of Italian and Spanish bonds to offset stimulus but instead allow the liquidity to course through the system. Dr King said the eurozone will have to embrace fiscal union in the end or face the same sort of "fiscal anarchy leading to financial implosion" that destroyed post-Soviet rouble area.

Mr Cailloux said private investors will not return to the market until the debts of Italy and Spain are on a "clear declining trend" and there is no longer any serious risk of contagion.
ECB  PIIGS  2011  sovereign  debt  G7  crisis  monetary  policy  monetization  folly  Fed  ZIRP  QE  bailout  EFSF  Italy  Spain  contagion  greatrecession  recovery  GFC 
august 2011 by asterisk2a
Dubai Denies Neighbors Fuel as City Struggles to Pay Off Debt: Arab Credit - Bloomberg
questionable ability to service and repay debt.
Dubai has $16 billion of publicly held debt maturing later this year, International Monetary Fund data show. 
Dubai borrowed at least $129 billion to turn itself into a tourism, trade and financial services hub, according to Credit Suisse Group AG. It had to seek help from neighboring Abu Dhabi after the global credit crunch dragged property prices down by more than half from their peak in 2008 and forced some state- owned companies to seek changes to payments.

Fixing PricesThe U.A.E. federal government fixes retail prices for gasoline and diesel at prices that are below retailers’ costs. It has left prices unchanged this year even as crude rises to 2 1/2 year highs. Last year, the government allowed two increases in pump prices.

“There have been no price increases in the Gulf since the Mideast protests began, as governments want no cause for similar opposition at home.”
dubai  AbuDhabi  sovereign  debt  crisis  2011  contagion  creditcrunch  creditcrisis  liquidity  Arab-Spring  jasminrevolution 
june 2011 by asterisk2a
Exclusive: Greek woes may eclipse Lehman: Ackermann | Reuters
Deutsche Bank's (DBKGn.DE) CEO described the situation in Greece as critical and warned contagion to other euro zone members could lead to a crisis bigger than the one sparked by the collapse of Lehman Brothers.

"If it is Greece alone, that's already big. But if other countries are drawn in through contagion, it could be bigger than Lehman," the Deutsche Bank chief said at a Reuters banking event on Monday.
deutschebank  josefackermann  contagion  PIIGS  2011  greece  bailout  austerity  EFSF  ESM  germany 
june 2011 by asterisk2a
Trichet Says Risk Signals Are Flashing Red as Debt Crisis Threatens Banks - Bloomberg
European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks.

“On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

BNP Paribas (BNP) SA, France’s biggest bank, and rivals Societe Generale (GLE) SA and Credit Agricole SA (ACA) may have their credit ratings cut by Moody’s Investors Service because of their Greek investments, the ratings company said on June 15. German banks could also be at risk from contagion, Fitch said last month.
PIIGS  sovereign  debt  trichet  ECB  ESRB  contagion  bank  solvency  capital  2011  exposure  libor  Greece  default  complexity  credit  creditcrunch  liquidity  interbank 
june 2011 by asterisk2a
Bonello Urges ECB Caution in Raising Rates as Most-Indebted Nations Suffer - Bloomberg
European Central Bank council member Michael Bonello said policy makers mustn’t raise interest rates at the expense of economic growth in debt-strapped euro- area nations if inflation expectations remain contained.

“The sovereign debt crisis is not yet behind us, and the banking sector in some countries -- which is a key to finding a solution to the crisis -- is still very fragile,” Bonello said. “We could still see an accentuation of the negative feedback loop from the financial sector to the real economy via the sovereign debt channel. The risks to growth could well be tilting to the downside.”


caution not to repeat same mistake Japan made.
“In uncertain circumstances like these, we need to balance doctrine with pragmatism,” Bonello, who heads the Central Bank of Malta, said in an April 15 interview in Valletta. “We must be careful not to make it more difficult for countries to grow out of their debt problem.”
ECB  europe  japan  lostdecade  history  recovery  PIIGS  comparison  sovereign  debt  risk  trichet  Axelweber  germany  inflation  monetary  policy  EMU  banking  contagion 
april 2011 by asterisk2a
Eurozone ship is on the course that was set for it: heading for the rocks - Telegraph
Two events last week saw the crisis in the eurozone deepen - the Portuguese bail-out and the ECB's interest rate increase. But much more is brewing.

Debt is one facet of the euro's crisis. There are three others.
The second factor is the property market.
The third factor is the weakness of the banks.

The euro is supposedly cemented by unshakeable political will. Yet not only has the eurozone failed to establish workable union-wide political institutions, but the political situation in member countries has turned ugly.Portugal and Belgium are without governments.
ECB  PIIGS  contagion  2011  bailout  EFSF  ESM  banking  europe  EMU 
april 2011 by asterisk2a
Goldman's Tilton On European Clinical Contagion | zero hedge
At this point, we have seen only a modest increase in the cost of credit (about 20 basis points on investment-grade credit spreads). As discussed below, risk-free yields have moved significantly lower, pushing private-sector borrowing rates down on net. In the “severe” scenario, we assume this situation is reversed: wider spreads more than offset lower risk-free rates, resulting in a net drag on growth. This was what we observed in the acute stages of the 2008-2009 crisis.
However, should a European credit crunch occur, we think the transmission to the United States would be less intense than that experienced b

n, only a fraction of estimated European bank losses on US residential mortgage debt and related securities. More broadly, analysis of the co-movement of US and European financial conditions suggests that the transmission is typically stronger from the US to Europe than vice versa.
contagion  PIIGS  sovereign  debt  double-dip  USA  Europe 
may 2010 by asterisk2a
EU: »Vertrauen Sie Europa!« | Politik | ZEIT ONLINE
Der EU fehlt eine Ergänzung der Geld- durch eine Wirtschaftspolitik. Die hatte ich schon 1989 in meinem Bericht an den Europäischen Rat gefordert, und der stimmte damals auch zu. Aber danach konzentrierte sich alles nur auf die Geldpolitik. Ein Konstruktionsfehler! Hätten wir den europäischen Institutionen die richtigen Kompetenzen gegeben, hätten sie schon zu Beginn der Exzesse an den britischen oder spanischen Immobiliemärkten Alarm schlagen können.


Die habe ich nie gefordert. Uns fehlt es in der EU doch nicht an Institutionen. Ich wollte mehr Koordination der nationalen Wirtschaftspolitiken. Es gibt ja nicht nur die Wahl zwischen souveränen Staaten mit jeweils eigenen Währungen einerseits und US von Europa andererseits, nach dem Modell der USA etwa. Insofern ist auch die Alternative falsch, die von Krugman & Stiglitz formuliert wird: entweder Zerfall der Euro-Zone oder eine europäische Regierung. Nationalstaaten werden fortbestehen, enger zusammenrücken.
EMU  Europe  EU  contagion  history  JosephStiglitz  paulkrugman  2010 
may 2010 by asterisk2a
EU Finance Chiefs Race to Ready Emergency Fund Before Asian Markets Open - Bloomberg
“When the markets re-open Monday, we will have in place a mechanism to defend the euro,” French President Nicolas Sarkozy said. “If you don’t think that’s significant, you haven’t been to many EU summits.” Sarkozy cancelled a planned trip to Moscow today to deal with the crisis.

Barroso said he wouldn’t push the independent European Central Bank to, for example, buy government bonds. ECB President Jean-Claude Trichet accelerated the market selloff on May 6 by rejecting that measure.
sarkozy  trichet  angelamerkel  ECB  monetization  debt  sovereign  greece  PIIGS  EMU  contagion  systemicrisk  bailout  germany  politics  may  2010  creditcrunch  creditcrisis  solvency 
may 2010 by asterisk2a
ECB’s Weber Sees Threat of ‘Grave’ Greek Contagion (Update2) -
“There is a threat of grave contagion effects for other member states in the monetary union and increasing negative feedback loop effects on capital markets,” Weber said in a statement today as German lawmakers in Berlin debate the proposed rescue of Greece. “All in all, Germany’s contribution to the aid package for Greece is justifiable.”
contagion  greece  PIIGS  bailout  may  2010 
may 2010 by asterisk2a
Pension Pulse: A Fragile Global Recovery?
With a surge in Greece’s bond yields yesterday to the highest since 1998 putting pressure on its government to accept an international bailout, Fischer said aid would only work best if accompanied by efforts to cut the country’s budget deficit.

“The best sort of strategy is to undertake the measures that will solve the underlying problem,” Fischer said. “If you’re not going to adjust, but Greece is going to adjust, then you’re just making a bigger debt problem for the future.”

Asked whether Greece’s woes will prompt investors to start targeting other European economies with large budget gaps, Fischer said “it depends how well the other countries decide to deal with their problems.”
greece  contagion  bailout  april  2010  europe  PIIGS 
april 2010 by asterisk2a
Fitch downgrades Greece to BBB- with a negative outlook - Credit Writedowns
And as long-time EM observers, we would NEVER, ever underestimate the threat of contagion.
creditcrunch  creditcrisis  greece  europe  eu  ECB  2010  april  rating  creditrating  contagion 
april 2010 by asterisk2a
European Central Bank Chief Economist: 'Everyone Is a Sinner at the Moment' - SPIEGEL ONLINE - News - International
The country has no other choice. Part 3: Greece 'Must and Will Make It'

SPIEGEL: How do you feel, for example, about the idea of all countries issuing a joint euro bond?

Graphic: Euro-dollar exchange rate

Graphic: Euro-dollar exchange rate
Stark: It was already discussed a while ago. But it would not solve the structural problems of countries like Greece at all. Besides, it would require some euro countries to take responsibility for the debts of others. Interest rates would rise in the euro countries that have managed their economies effectively and would fall in the other countries.
europe  euro  europe-flu  debt  greece  PIIGS  EMU  greatrecession  recession  contagion  ECB  comment  opinion  2010  outlook  CDS  public  government  austerity  society  unrest  eurobond 
february 2010 by asterisk2a

related tags

Abenomics  AbuDhabi  academia  academics  accountability  AfD  Africa  allocation  Angela  angelamerkel  animal  april  Arab-Spring  Asia  asset  August  austerity  Axelweber  bad  BaFin  bail-in  bailin  bailout  balance  bank  banking  bankrun  bankruptcy  banks  Basel  Basel3  basis  behavioral  belguim  benbernanke  bipolar  BIS  Blyth  BOE  BOJ  bond  book  boom  borderless  Brexit  BRIC  BuBa  bubble  bubbles  Bundesbank  business  buyback  capital  capital-controls  capital-flight  Career  Carney  CDS  CDU  centralbanks  China  ChristineLagarde  civil  class  Collapse  comment  Commerzbank  commodities  comparison  complexity  confidence  consent  consequences  consumer  contagion  contamination  controls  corporate  credit  creditcrisis  creditcrunch  creditcunch  creditrating  crisis  CSU  currencies  currency  currency-war  cycle  cyprus  damage  debasement  debt  debtoverhang  decade  default  deficit  deflation  deflationary  deleveraging  demand  democracy  deposit  depression  derivatives  Deutsche  deutschebank  developed  Developing  Dijsselbloem  disorder  distortion  Dodd-Frank  dogma  double-dip  dubai  ECB  economic  economic-thought  economics  economist  economy  EFSF  ELA  emerging  EMU  energy  equity  error  ESM  ESRB  eu  EUR-USD  euro  eurobond  europe  europe-flu  European  EuropeanCommission  EuropeanSystemicRiskBoard  europeanunion  EURUSD  event  exposure  exuberance  facility  Fairy  far-right  faultlines  fed  finance  financial  fiscal  flat  folly  for  forecast  France  G7  GDP  generation  germany  Gesellschaft  GFC  global  globalisation  globalization  Gold  goldmansachs  governance  government  greatrecesion  greatrecession  greece  Greed  Grexit  growth  haircut  history  hot  hot-money  household  hubris  human  hunt  ideology  III  imbalance  imbalances  IMF  Impediments  incomplete  India  Indian  inflation  information  integration  interbank  interest  investment  irrational  ISDA  Italy  japan  jasminrevolution  Jean-Claude  Jens  Jeroen  Jim  josefackermann  JosephStiglitz  jubilee  Juncker  Koo  Laiki  Leadership  lending  leverage  liberal  libor  liquidity  loan  lobby  lost  lostdecade  LTRO  Lügenpresse  macroeconomic  macroprudential  Makers  manufactured  margin  MarioDraghi  Mark  market  Matteo  maximisation  may  mechanism  Merkel  MervynKing  middle  model  modern  monetary  monetisation  monetization  money  moralhazard  mortgage  negative  New  NiallFerguson  NIRP  non-performing  Normal  NPL  OECD  of  Oil  OMT  OPEC  opinion  Opportunism  opportunist  outlook  overnight  oversight  Pact  panic  paulkrugman  PBOC  PIGS  PIIGS  PIMCO  Podemos  policy  politcal  political  Politicians  politics  populism  Portugal  price  private  profit  Project  property  psychology  public  QE  rate  rating  RBI  real  recapitalisation  recapitalization  recession  recovery  Referendum  reflate  reflation  reform  regulation  Renzi  repo  repression  restructuring  Richard  richardkoo  right-wing  risk  RMB  Robert  robertshiller  Rogers  Rupee  Russia  s  sarkozy  scenario  Schuldenbremse  Schäuble  secular  shadow  share  shareholder  sheet  Shiller  short-term  simplicity  slowdown  SMP  society  solidarity  solvency  South  sovereign  Spain  SPD  speculation  speculative  spirit  stagnation  state  stimulus  Stockholm  Street  stresstest  structural  Student  Super  Supervision  sustainability  sustainable  swap  Syndrome  Syriza  system  systemic  systemicrisk  systemrelevant  systemrelevanz  Taper  target2-system  TBTF  theory  thinking  toobigtofail  trade  trading  tragedy  transmission  transparency  trap  trichet  Troika  trust  trustagent  UK  uncertainty  unconventional  underwater  unintended  union  unknown  unkown  unrest  USA  value  Varoufakis  view  violence  VIX  volatility  Wall  war  Weidmann  western  Wirtschaftswunder  Wolfgang  world  WW2  Yanis  yield  Yuan  ZIRP  zombi  zombie 

Copy this bookmark: