The Financial Times – Europe’s largest banks have become too big to save The financial fates of Europe’s banks and its governments are inextricably linked: because the banks are the primary source of funding for government deficits, government debt represents a large proportion of the asset base of most eurozone banks. Insolvency of one therefore… Continue reading Too Big To Save
Bloomberg.com – Papademos: Greece Keeping Euro Is Only Choice Greek Prime Minister Lucas Papademos, charged with securing international financing to avert a collapse of the economy, said keeping the euro is the only way forward for the country. “Our membership of the euro is a guarantee of monetary stability and creates the right conditions for… Continue reading Greece Ponders The Euro
The Wall Street Journal – Timing Questions Emerge on MF Global Cash Hundreds of millions of dollars might have gone missing from customer accounts at MF Global Holdings Ltd. as far back as four days before the securities firm filed for bankruptcy protection, people familiar with the situation said Monday. The possibility of a shortfall… Continue reading MF Global’s Missing Cash
The Wall Street Journal – Let’s Give Some Credit To Credit-Default Swaps Since its conception in a Florida resort, the CDS market has grown to more than $15 trillion in “gross notional value”—the face value of the CDSs, excluding offsetting contracts—as pension funds, banks and hedge funds have flocked to the swaps. Seventeen years later,… Continue reading CDS
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CNBC – Warren Buffett on CNBC: ‘Not Clear’ Europe Has Will or Ability to Resolve Crisis Warren Buffett says it’s not clear Europe has the will or ability to do “whatever it takes” to resolve its debt crisis. He thinks we’re seeing a partial run on Europe and he’s concerned about lack of confidence in… Continue reading How To Fix Europe
<Click on chart for larger image> Bloomberg.com – Italy Obsessed by ‘Lo Spread’ as Yields Surge As Italy struggles to survive the European debt crisis, watching “lo spread” is becoming a national obsession. The yield difference between Italian 10-year government bonds and German bunds surged to a record 5.5 percentage points on Nov. 9 after… Continue reading Italy
The Wall Street Journal – Euro Risks Hit Banks Questions About Hedges Fester as Firms Detail Exposure Mounting concerns over the euro-zone crisis are prompting some of the world’s largest banks, including U.S. banks, to release more information about their exposure. Even so, the flow of new data has so far failed to put worries… Continue reading Euro Banks
Spiegel (Germany) – Berlin Prepares for Possible Greek Exit from Euro Zone The German government has been simulating a range of scenarios to prepare for a possible exit of Greece from the euro zone. Under a worst-worst-case scenario, the country could descend into a vicious circle of misery that could last decades. The German government… Continue reading Is Greece Going To Leave?
The Financial Times – Bundesbank warns against intervention The president of Germany’s powerful Bundesbank has firmly rebuffed international demands for decisive intervention in the bond markets by the European Central Bank to combat the eurozone debt crisis, warning that such steps would add to instability by violating European law. Bundesbank president Jens Weidmann told the… Continue reading No QE For The ECB
<Click on chart for larger image> Barron’s – Gene Epstein: Less Recession Risk, With Caution There are some glimmers of hope, but the economic misery still looks like it will be prolonged. A real jobs uptick in 2015? The consensus now expects 2.3% growth in the current quarter, noticeably higher than last month’s projection. But… Continue reading Recession?
MSN/Money – Something’s fishy in many earnings reports It might seem unsurprising that some companies tend to exceed expectations in earnings seasons, and that other companies don’t. It might seem natural. Research last year by Joseph Grundfest and Nadya Malenko of Stanford suggests, though, that something fishy might be going on. They studied about half… Continue reading Are Earnings Rigged?