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For Europe, Every Day Is A New Adventure

by John Rubino on January 12, 2012

Europe’s parade of surreal financial news just keeps coming. This week, investors are paying Germany to take their money by accepting negative interest rates on new government debt: Germany Issues Bills With Negative Yields As Economists Agree Country Is In Recession Continuing the schizoid overnight theme, we look at Germany which just sold €3.9 billion [...]

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Europe’s Problem, America’s Solution

by John Rubino on December 13, 2011

Greece has been out of the spotlight for a couple of weeks, which means it’s past due for another market-rattling announcement. And sure enough, today we find out that its economy is shrinking even faster than expected: Greece Apparently Even Worse Off Than Realized, Hitting Euro, Stocks This flew under the radar a little bit [...]

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Currency Wars: “Strong Yen Is Destroying Japanese Industry”

by John Rubino on December 12, 2011

The thing to understand about inflation is that if one major country does it, all the others have to do it too. A single country can benefit by making its currency less valuable, because a falling exchange rate gives its exporters a pricing edge in global markets. But the pop in exports comes at the [...]

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This is Europe’s “Powerful” Plan?

by John Rubino on December 8, 2011

Europe’s leaders have convened another summit meeting that will, they promise, put all the break-up speculation to bed once and for all. But the ideas that were floated pre-meeting are, um, logically challenged. Consider this excerpt from a recent Wall Street Journal article: The Pitfalls of Merkozy’s Third Way …Perhaps the markets are simply relieved [...]

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Fooled Again!

by John Rubino on December 2, 2011

The pattern is by now so familiar that it deserves a place beside other technical indicators like moving averages and Fibonacci retracements. It begins with part or all of the global economy appearing to implode under its five-decade accumulation of debt. The public sector/central bank nexus responds with a liquidity injection, leading the markets to [...]

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Make-Or-Break Week For Europe

by John Rubino on November 27, 2011

The people buying bonds issued by Italy and Spain are clearly looking past the dysfunctional balance sheets and focusing on Germany’s reluctance to let a major PIIGS country default. So an Italian bond, in the mind of the market, becomes a German bond. But this sword cuts both ways. If European debts are tossed into [...]

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Why Would Anyone Buy A Spanish Bond? Part 3

by John Rubino on November 20, 2011

The Eurozone’s descent into chaos is starting to get repetitive — though with each iteration the numbers do get scarier. Back in 2010, for instance, the crisis was already almost a year old and Spain looked like the most likely post-Greece domino. In Why Would Anyone Buy a Spanish Bond? and Why Would Anyone Buy [...]

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And You Thought the Real Estate Bust Was Over

by John Rubino on November 7, 2011

This week all eyes are on Greece and Italy, which is reasonable since they’re likely to be pretty entertaining. But as incredible as it sounds, PIIGS country sovereign debt might not be the biggest banking-system threat on the immediate horizon. It turns out that the largest European banks have held onto — and apparently failed [...]

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Welcome To The Third World, Part 2: Real Lives

by John Rubino on November 1, 2011

Yesterday’s Wall Street Journal devoted an entire page to the differences between today’s economy and a typical recovery: Slow Recovery Feels Like Recession Americans are two years into a recovery that doesn’t feel much different to many of them from life during the most bruising recession in seven decades. Scenes of the long haul back [...]

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What Would Happen if Goldman Sachs Disappeared?

by John Rubino on October 24, 2011

As Europe grinds out yet another doomed banking system rescue plan, it might be helpful to examine the underlying assumption, which is that we need these big banks. Do we really? If Goldman Sachs, JP Morgan Chase, Deutsche Bank, Crédit Lyonnais and five or six of their peers ceased to exist tonight, what would happen? [...]

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