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EU
I’ve received many questions on really what the Brexit means. It is a rather confusing subject in many ways so I found a very good article that does a better job explaining it than I could personally. I wouldn’t pay too much consideration into the last few days trading since the results of the election...
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Euro leaders produced some tangible results over the night through extended discussions.  They agreed to set up a single banking supervisor to oversee the industry, and this will enable funding from the ESM, which takes pressure off the peripheral countries economies that are struggling to raise cash at reasonable prices.  Finance ministers are targeting a...
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Alexis Tspiras, head of Greece’s biggest anti-bailout party Syriza, continues to beat the drum of cancelling the agreed upon terms of their bailout.  This is an amazingly dangerous and manipulative campaign that distorts facts, and preys on those who are consumed by the deep recession and the accompanying unemployment.  If Greece were to abandon their...
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I’m glad to see that the Italian Prime Minister Mario Monti is ratcheting up pressure on the German’s to be more flexible in aiding peripheral Europe.  I really don’t think the Germans have any choice if there wish is to save the European Union.  With the current disruptions in Spain due to the restructuring of...
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While I don’t think this goes far enough I still do view the discussion of a ‘Banking Union’ as a positive.  This crisis will not be resolved without a stricter Union.  The best solution would be for Euro-Bonds, a TARP-like program, and more tangible oversight of fiscal budgets.  There is no EU if Germany remains...
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In an extremely positive development Italian Prime Minister Mario Monti said a majority of EU leaders support euro-bonds.  This is what absolutely has to happen to recapitalize the banks, fund sovereign debt, and get past this crisis period.  Germany and the other AAA’s will see a much larger long term benefit by keeping the EU...
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New French President Francois Hollande is very much interested in changing Franco-German relations.  The current economic policy being instituted to deal with the European crisis is based almost 100% on austerity.  The leadership of German Chancellor Angela Merkel has been strong but I believe slightly misguided in that not enough has been done to boost...
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Ray Dalio of Bridgewater Associate shares some very pertinent insight into the deleveraging processes taking place in both the United States and Europe.  He correctly identifies that the closest parallel to the current European crisis is situation the United States of America found itself in when it had the Articles of Confederation before the establishment...
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Provisions for loan losses in Spain continue to rise deepening the financial problems in the European economy.  Unlike in the United States many of these banks haven’t raised the necessary capital but instead merged with other larger banks.  The EU needs to have mechanisms in place to recapitalize the banks and stimulate growth. If banks...
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It’s not surprising that after last week Spain is looking for help from the ECB through the purchasing of bonds in the secondary market.  I think the ECB should definitely get involved while making sure Spain understands that their help is contingent upon them cutting the fat our of their budget.  The ultimate costs will...
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