Major global banks are advising clients to prepare for a stock market rally and a resurgence of the euro if Greece is forced out of monetary union, betting that world authorites will flood the international system with liquidity.
By Daryl Montgomery: Exactly three years after Lehman Brothers filed for bankruptcy and almost brought down the global financial system, central banks in North America, Europe and Asia engaged in a coordinated money pumping operation to prevent the EU banking system from stalling. The move created a sharp stock market rally, especially in financial shares, just as was the case when similar actions took place during the 2008 credit crisis. Involved in Thursday's action were the U.S.
As we have discussed numerous times, nothing lasts forever - especially reserve currencies - no matter how much one hopes that the status-quo remains so, in the end the exuberant previlege is extorted just one too many times. Headline after headlines shows nations declaring 'interest' or direct discussions in diversifying away from the US dollar...
In the aftermath of the record cash crunch in the Chinese interbank market, many financial institutions in China and abroad have been hoping that the PBOC would either end its stance of aloof detachment or at least break its vow of silence and if not act then at a minimum promise good times ahead. Alas, despite repeated confusion in various press reports that it has done that, it hasn't aside from the occasional "behind the scenes" bank bailout.
Cowards Win For NowWe will not get to see the precise wording of Prime Minister George Papandreou's referendum because enough cowards in the Greek parliament in conjunction with blackmail by Merkel and Sarkozy have put an end to Papandreou's regime.Thus, the on-off on-off Greek referendum is once again set to "off" this time permanently.Equity markets reacted positively to the referendum cancellation and also to the surprise rate cut by the ECB, but the euphoria will not last (except perhaps for gold).
With China’s credit-to-GDP ratio over 200%, it appears, as Barclays notes, that the PBoC is acting in line with the government’s efforts to deleverage, rebalance and position the economy towards a path for sustainable growth.
ROME — The front-runner to become Italy’s next prime minister warned Friday of a Greek-style social and economic meltdown unless austerity measures were maintained.
Final rallies in Rome, Naples and Florence ahead of Sunday’s general election brought a flurry of last-minute appeals to a deeply-disillusioned nation.
Polls suggest as many five million Italians have not made up their minds which party to support in the election, which will be held over two days in a country hit by a series of corporate and political scandals.
CNBC asks So Why Are Spanish Bond Yields Falling? Well, that's a good question. Short answer: Well rates spiked dramatically, and we are seeing some retracement from the psychological balm of even more liquidity thrown from the global central planning cartel, otherwise known as the central banks.