Today’s issue of The Daily Reckoning features the first installment of the “Farewell Euro Tour” — a collection of on-the-street conversations with ordinary folks in Europe about the Greek crisis, and about what this crisis portends for the euro zone. The tour began in the Netherlands, then moved south to Switzerland and then to Italy.
[Read more...]Discovering a Growing Disapproval for Greek Bailouts
October 3, 2011 By Leave a Comment
Hey, what’s this? Greece can’t pay its bills?!
Yes, it’s true, Dear Reader, the Greek finance ministry disclosed once again yesterday that its deficit will be “higher than expected.”
“The deficit this year will likely be 8.5 percent of its gross domestic product,” the Associated Press reports, “higher than the 7.8 percent previously anticipated, and blamed a deeper-than-expected recession for the failure. The Greek economy is projected to shrink 5.5 percent this year.
[Read more...]How the EU Has Secured the Greek Default it Sought to Avoid
September 30, 2011 By Leave a Comment
“Germany Backs Rescue Fund,” the front page of today’s Financial Times declares. “Victory for Merkel on Euro Zone Aid,” adds the front page of today’s International Herald Tribune.
Good times, apparently, are here again…if the stories that followed these headlines are to be believed.
[Read more...]Making Way for the Era of Sovereign Default
September 6, 2011 By Leave a Comment
American investors returned from their Labor Day holiday to face another laborious trading day on Wall Street. As your California editor pecks away at his keyboard this afternoon, the Dow Jones Industrial Average is down more than 200 points to within spitting distance of 11,000.
For the first three trading days of September 2011, the Dow has tumbled more than 600 points — or about 5% — the worst three-day start for the month of September in the history of the US stock market. (Thanks to CNBC for this utterly meaningless statistic).
[Read more...]US Dollar Rallies as Swiss Franc Loses Its Ability to Float
September 6, 2011 By Leave a Comment
There’s a fly in the ointment, folks… The ointment being the bailouts of Greece, Ireland and Portugal… A German court is going to rule on the constitutionality, or legality, of Germany’s participation in the bailouts, and this ruling is expected tomorrow, September 7th!
This is like here in the US, where we just circumvent the Constitution and it takes a ruling by the Supreme Court to overrule something that should never have started… Well… Apparently, Germany’s participation in the bailouts is considered to be against the law of the land… Germany’s Chancellor, Angela Merkel, has tried to sneak the sun past the rooster here, and now, we’ll see if the German Court will look the other way or not…
[Read more...]Possible Italian Bailout Moves Markets
July 11, 2011 By Leave a Comment
It’s one of those “risk off” days, in the parlance of the Street.
European leaders are meeting to discuss whether Italy will soon need a bailout – shocking traders who thought the whole euro mess was fixed when Greece secured its second bailout a few days ago.
The Dow, which crested 12,700 on Thursday, will be lucky to finish today above 12,500. The S&P is down more than 1.5%.
[Read more...]Going Broke With Greece
July 6, 2011 By Leave a Comment
When you poke a pig, it squeals.
Last week, The Wall Street Journal poked the largest money market funds in the country for loading up on European bank debt. The Investment Company Institute (ICI) started squealing immediately.
In a June 27 editorial entitled, “Money-Market Mayhem,” the Journal accused the money market fund industry of “[piling] into European bank debt, even as everyone knew those banks had stocked up on bad European sovereign paper. The US Treasury is even saying privately that the US needs to support the European bailout of Greece lest European banks fail, US funds take big losses, and we get another flight from money funds.”
[Read more...]A Greek Resolution…For Now
June 17, 2011 By Leave a Comment
Front and center this morning… There was a story that hit the newswires in the European session that claimed the bailout of 150 billion euros was close to being agreed on by all parties… The euro (EUR) shot up on this news, and is back to 1.42, after spending most of yesterday with a 1.40 handle, and looking very much in need of some medicine… Well, that medicine came in the form of an unsubstantiated newswire story… I say that because there is no proof that this is the case. So… Don’t get too comfy, cozy, with the 1.42 handle in euros… The rug could be pulled on that rally in a New York Minute…
[Read more...]
A Final Stop on the Farewell Euro Tour
Today’s issue of The Daily Reckoning features the third and final installment of the “Farewell Euro Tour” — a collection of on-the-street conversations with ordinary folks in Europe about the Greek crisis, and about what this crisis portends for the euro zone. The tour began in the Netherlands, then moved south to Switzerland and then to Italy.
[Read more...]