MADRID | Berlin is utterly bewildered, according to official sources, by the clumsy way Madrid is running its current crisis. A high ranking government representative stunned his German counterparts by openly declaring that Spain would be ready to find its way out of the euro if that was the prize to avoid intervention. He wasn’t bluffing. On Monday this week he presented PM Rajoy and ministers in charge of economic matters…
NEW YORK | When feeling overwhelmed with all the economic misery originated by a reckless Wall Street and a lax Washington, the regulator in chief, one tends to calm down thinking positively: at least we learnt the lesson. As the Chinese say, in every crisis there is also an opportunity, and maybe we improved the system. Yet then some articles come up: one pointing to the fact that lenders are…
LONDON | Standard Life Investments, the global investment manager, said on Thursday that the debt deleveraging cycle was showing signs of improvement, especially in the US, while admitting that the process remains a long and complex one after such a major financial crisis. In the latest edition of Global Outlook, Standard Life Investments highlighted that one of the key features differentiating this business cycle from most of its predecessors was…
By Luis Arroyo, in Madrid | A misdiagnosis can be fatal for the patient. Especially if the doctor is German, or Spanish but disciple of the Bundesbank school. Inflation is bad and so the public deficit is, that is the slogan. Let the people discuss whether this or that department should be reduced or not, and what about pensions or public investment?, VAT yes or no?, while the economy gets worse and…
NEW YORK | As the European Central Bank signaled it may resume asset purchases if needed to stem the crisis, the yield on Spanish 10-year bonds slid to 5.82%. Notwithstanding the last few days Spanish bonds went under the unwanted spotlight: yields on the 10 years bonds rose to nearly 6% on Tuesday, the highest since January. In less than two months, Spain’s interest rate has risen about one point….
MADRID | According to Alberto Vigil, analyst at Barclays in Madrid, the peripheral euro risk and particularly Spain’s has been exaggerated by the markets, which would be discounting an economic situation perceived as poor and with a very limited range of choices. Yet, Vigil maintained an optimistic opinion and said investors will reconsider their position when reviewing the strengths of the country. “Spain could have done its reforms much better, but…
MADRID | People at command in Madrid seem baffled by the massive onslaught inflicted on the economy. A steeply rising risk premium coupled with the severe battering the stock market is receiving have dampened any hope to steer out of trouble with minor collateral damage. The dream of a soft landing has switched into the nightmare of plausible intervention. Fear to fall in that abyss has materialised in a rather hectic…
From a Morgan Stanley research note, a cautionary tale on what happens when the US Federal Reserve’s Quantitative Easing tap is closed and, more globally, when central banks stop supporting currently struggling economies in the developed countries. Analysts describe QE termination as one of the main risks of the next stage in the cycle… in Europe, too. “Our analysis of European equities around the first hike by the Fed historically…
LONDON | In a report to investors in London, Newton Global Dynamic Bond Fund, which is part of Bank of New York Mellon, noted that political decisions taken by the European Comission regarding the euro crisis are a source of worry for the markets. In fact, plans to tackle weak economies in the periphery may be raising the chances of default. Newton GDB Fund said that its portfolios have increased…
NEW YORK | It’s been a bad day for Spain in Wall Street’s most read media. The tepid bond auction is to blame: Spain sold a total of $3.43 billion in bonds with maturities between 2015 and 2020, near the bottom of its target volume. Spain expected to sell between $3,28 billion and a planned maximum of $4,6 billion. There was a weaker demand and therefore it had to pay…