Category Archive: 2.) Europe and Euro Crisis

Main Author George Dorgan
George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.

ECB and the Future of QE

ECB will likely extend asset purchases in full. It may modify the rules by which it buys securities. It may adjust the rules of engagement for its securities lending program.

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Greek Bonds may Soon be Included in ECB Purchases

The ECB accepts Greek bonds as collateral but does not include them in its asset purchases. A new staff-level agreement by the end of the year could change that. Finance ministers imply that Greece's debt is sustainable, but the IMF disagrees.

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Italian Euro Exit: Why it Might Come in some Years and Why it Will Help the Euro Zone and Italy

Italy has three options: 1. exit the euro zone and devalue the currency; 2. remain in the euro zone and devalue salaries. 3. go for Japan-like decades-long slow growth with stagnating wages, but also with falling inflation and (positive news!) falling bond yields.

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L’Allemagne est le patron-sponsor de l’Eurosystem.

Lors des échanges commerciaux et interbancaires, il y a des banques émettrices de monnaie et vis-à-vis une banque réceptrice. Normalement, à la fin de la journée, tout cela devrait être ramené à l’équilibre. Ceci n’est plus le cas depuis la crise américaine de 2007 (subprimes) comme nous le voyons sur le graphique ci-dessous de quelques pays de la zone euro.

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The Italian Job

Italy is the epicenter of the next potential populist "shock." A defeat of the referendum is seen as intensifying the political risk. Renzi has wavered again regarding his political future if the referendum loses.

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Great Graphic: Euro-the Big Picture

Most economists are focusing on either US monetary policy or US fiscal policy. We focus on the policy mix. After the policy mix, politics is also a weigh on the euro. Our long-term call is for the euro to revisit the lows from 2000.

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European break up now looks more likely, says Blond

If there’s one country with reason to resent the rise of populist movements, it’s Switzerland. Twenty-two months after it abandoned its 1.20-per-euro exchange-rate cap, the Swiss National Bank still finds the franc in focus every time there’s a major event that threatens to upset markets.

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Serious Flaws in ECB’s Economic Thinking

Marc Meyer shows that the European Central Bank has big flaws in their economic thinking. Lowering the ECB Deposit Rate means depressing the economy. The ECB takes the risk when it buys Greek bonds. Should Greek bonds devalue then the ECB equity ratio falls under zero and European banks write must write-down their ECB Deposits.

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Europe stocks split on Trump win with pharma gaining

The region’s largest industry group headed for its biggest jump in more than 14 months, tempering losses for equity benchmarks after Donald Trump won the race to govern the region’s biggest export market. Novo Nordisk A/S and Shire Plc rose more than 5 percent, after investors punished the shares in recent weeks amid disappointing earnings and speculation Hillary Clinton would push for drug-price controls as president. Citigroup Inc. had cut its...

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Great Graphic: Sentix Shows a Shift

The risk that the eurozone implodes over the next year has risen, but is still modest. Italy has surpassed Greece as the most likely candidate. The December referendum is the second part of Renzi's political reforms.

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When It Comes To Household Income, Sweden & Germany Rank With Kentucky

Annual Median Equivalized Disposable Household Income in USD
Last year, I posted an article titled "If Sweden and Germany Became US States, They Would be Among the Poorest States" which, produced a sizable and heated debate, including that found in the comments below this article at The Washington Post. The reason for the controversy, of course, is that it has nearly reached the point of dogma with many leftists that European countries enjoy higher standards of living thanks to more government regulation and...

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Great Graphic: Italian Banks and a German Bank

DB and Italian bank stocks have been moving in tandem. They suffer from fundamentally different problems. The euro has been selling off as the bank shares rebound.

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The ECB Made A Mistake During Its Daily Bond Purchases

Something unexpected happened when the ECB released its latest bond purchase data at during its scheduled release time on Monday: in addition to the purchase of at least 20 separate corporate bonds under the bank's CSPP bond buying program during the week ended October 14, amounting to a total of €1.84 billion, which lifted the number of securities held by the central bank to 660, bringing the total to amount of its holdings to €33.8 billion, or...

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Great Graphic: US-German 2-Yr Differential and the Euro

The US premium over Germany is at its widest since 2006. This is despite a small reduction in odds of a hike in December. There are many forces are work, but over time, the widening differential will likely give the dollar better traction.

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Deutsche Bank CEO Returns Home Empty-Handed After Failing To Reach ‘Deal’ With DOJ: Bild

Following the seemingly endless procession of short-squeeze-fueling trial balloons last week - from settlement rumors to German blue-chip bailouts to Qatari investors - Germany's Bild newspaper confirms the rumors that sparked weakness on Friday: Deutsche bank CEO John Cryan has failed to reach an agreement with the US Justice Department.

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Why Portugal Matters

DBRS reviews its investment grade rating of Portugal on Oct 21. A cut in its rating would have far reaching implications. A cut in the outlook is more likely than a cut the rating.

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Will The ECB Buy Stocks?

Debate about the ECB’s stimulus options have continued to rage, with an equity purchase plan mentioned as a possibility. We think the ECB could legally buy ETFs that fit its requirements… but it would be controversial and we question the benefits. An ETF programme could total EUR 200bn, which would not be large compared to the overall QE programme.

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The Italian Dilemma

The sudden panic about a potentially imminent Italian banking sector collapse back in July has somewhat subsided for now, but sooner or later the issue will inevitably rear its ugly head again.

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Renzi and the Italian Referendum: Disruption Potential Minimized

Italian Prime Minister has set the date for the constitutional referendum as late as practically possibly. It will be held on December 4. The issue is the perfect bicameralism that gives as much power to the Senate as the Chamber of Deputies. Renzi's argument is that the political reform is necessary to make Italy governable. Italy has had 63 governments since the end of WWII. In order to address the economic challenges the country faces, political...

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Europe Debates The Burkini: “We Will Colonize You With Your Democratic Laws”

"We will colonize you with your democratic laws." — Yusuf al-Qaradawi, Egyptian Islamic cleric and chairman of the International Union of Muslim Scholars. "Beaches, like any public space, must be protected from religious claims. The burkini is an anti-social political project aimed in particular at subjugating women.

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