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Category Archives: Europe

Letter to DB Board

Dear Deutsche Bank board. Presumably you understand that you are not in a liquidity crunch but are in an existential crisis resulting from a severe balance sheet problem. The fact that your price to book is 0.41 means no one believes the asset value assignments on your balance sheet (among other things). If you want the institution to survive the next year, you are […] Read the rest of this entry »

Eurobonds: nein! ECB QE ja?

Anyone happen to catch the smack-down of Commerzbank’s CEO yesterday –by the German minister of finance?  Apparently, Commerzbank’s CEO suggested that eurobonds begin being offered.  Berlin wanted none of it. This begs the question:  If Berlin wants nothing to do with sharing the liability from joint eurozone sovereign bonds, how would it react to the ECB buying sovereign bonds via a QE program –wherein […] Read the rest of this entry »

What if the ECB does not launch QE this year?

For more than a year I’ve been expecting the ECB to tag-in with a QE printing press when the Fed tags-out. I’m still of that view. However, the ECB may wait until November-December to announce a QE program instead of my previously expected July-August timeframe. It depends on how ugly the spread in interest rates becomes between core and peripheral European sovereign bonds. Right […] Read the rest of this entry »

5 minute version of this week’s Greedometer Newsletter

  The main story continues to be the growing stress to the European financial system. Let’s call it what it is: the slo-mo collapse of the the euro currency union. Last Thursday morning, ECB President Mario Draghi spoke, but did not indicate trillions of euros were on the way. Not yet at least. So the air was let out of stock markets. Those losses […] Read the rest of this entry »

The Top Cometh…

  The view presented by the greedometers still indicate April is the top for risk assets and that the economic slowdown of 2012 – 2013 began earlier this year. The US economy will probably slow to the point where it stalls completely and falls back into recession in the current quarter. The book (Greedometer. Dow 5000. Why nobody sees it coming.) will go into […] Read the rest of this entry »

Short Economic Stories April 14 2012

Here in the US: From a 40,000ft view, the US economy seems to be slowing from an anemic pace to flat. I’m sticking with an estimate of 1.5 – 2% GDP growth rate for Q1, but 2Q is going to be hard pressed to see any growth at all. Indeed, I’m anticipating an increase in the speed of slowing as we go through the […] Read the rest of this entry »

Short Economic Stories April 7 2012

Since the beginning of the year, we’ve been watching the latest Fed -and now also ECB induced- bubble inflate. I’ve been trying to discern (with the aid of the greedometers) whether April or July will be a secular stock market peak from which another 50-60% collapse initiates. Granted the Fed and ECB will be forced to come to the rescue in August, but what […] Read the rest of this entry »

Short Economic Stories March 31 2012

In the US: Mr. Bernanke got the week going with a speech before markets opened on Monday. His comments were interpreted as a sign that more dollar printing would be on the way (hello QE3!). Mind you, there was no explicit commitment. In so doing, Mr. Bernanke is continuing to paint the Fed into a corner and further cementing the reliance of equity markets […] Read the rest of this entry »

Short Economic Stories March 24 2012

In the US: Weekly initial unemployment claims dropped under 350,000 for the first time in four years. Good. Now if we could find jobs for the 6-7 million others that have lost jobs and fallen out of the UI system, that would be nice. The latest housing data has been a mixed bag. House prices are stabilizing, but sales volumes remain low. And this […] Read the rest of this entry »

Short Economic Stories March 10 2012

The greedometers are increasingly suggesting that we’re currently in the warm-up act a few months before a secular top in risk assets. (More in the private client letter on Wednesday.) In addition, talk about low trading volume. Wow! Watching Friday’s equity markets, you would have thought two guys were buying and selling. When only 300M S&P500 company shares have traded by 3pm, you know […] Read the rest of this entry »