Tag Archives | Eurozone

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Complacency rises as markets fall

Financial markets are telling us something important about the outlook. Profitable themes over the past month have been expectations of weakness in crude oil prices, in China’s economy, and in the financial sector; plus positive views on long-dated government bonds in the JUUGS (Japan, UK, US, Germany, Switzerland). 90% of market players probably dismiss most, […]

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The Eurozone train crash heads for the buffers

For 25 years, Western policymakers coasted to electoral success on the back of an economic Supercycle. The BabyBoomers’ arrival in the Wealth Creator 25 – 54 age group meant there was just 16 months of recession between 1982-2007. Politics and policy thus hugged the middle ground. Political debate became based on focus groups, rather than […]

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Eurozone sees €789bn capital flight to the North

The blog’s many friends in the petchem industry in S Europe have become more frequent visitors to London in recent months. Often, they are in the process of buying flats or houses. As one long-standing friend commented, “would you want to leave your money in Spain today?” They are not alone. A detailed analysis by […]

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Leaving the Eurozone would be very difficult

Last December, the blog raised the question of how a country like Greece could actually leave the Eurozone. Many people believe this is inevitable. But how would the practical issues be solved? Now Wolfgang Münchau has taken up the challenge in the Financial Times. His research suggests there are only two possible exit routes: • […]

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Greek default just ‘end of the beginning’ in debt crisis

Yesterday saw the world’s largest ever sovereign debt default, when Greece finally carried through a €206bn ($272bn) restructuring. Yet only the eurozone leaders believe this will solve Greece’s problems and those of the other PIIGS (Portugal, Ireland, Italy and Spain). Greece is still left with a debt too large to be repaid. Its economy is […]

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Mahathir says Europe “must face up to new reality”

Mahathir Mohamad is one of the Grand Old Men of the Asian political establishment. He was Malaysian premier from 1981 – 2003, and led its rapid modernisation and economic growth. Over the period, which included the Asian financial crisis, the former colony’s economy grew four-fold in real terms, and it is now the 37th largest […]

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EU leaders turn to Anger

Human beings go through a number of stages when confronted by a major change such as today’s Crisis. As first described by Elisabeth Kübler Ross, the process starts with: • Denial that any change is taking place • Then Anger at the implications of the change • Bargaining to reduce its magnitude • Depression as […]

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Leaving the Eurozone creates practical problem

There is much discussion of countries such as Greece being likely to leave the Eurozone. Some even believe it is inevitable. But on a practical basis, how would it happen? This is a question that has been bothering the blog for some months. But with another crisis summit meeting about to start, it is no […]

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Brent’s premium to WTI hits Europe’s energy users

Europe is at the eye of the storm when it comes to energy pricing. This is the last thing required by its struggling economy. As the chart shows, Brent in euros (green line, RHS) is now back at the same level as June 2008, whereas WTI is 35% cheaper (black line, LHS). Such a divergence […]

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Eurozone moves closer to crisis

New analysis by Bloomberg supports the blog’s view last month that the arrest of former IMF head Dominique Strauss-Kahn (DSK) probably marked a critical turning-point in the Eurozone debt crisis Not only was DSK no longer able to persuade German chancellor Merkel that the problems needed just “a little more time, a little more money”. […]

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