Death Star Economics



A reminder that the UK would rather be the US

All European cat-fighting got a lot more serious, or should I say a matter of life and death, when Angela Merkel said there would be no Eurobonds for as long as she lives. Needless to say, her disgruntled communications squad made her amend the statement immediately. That puts her against the proposal of the joint EU presidents from yesterday. Meanwhile, Mario Monti made the opposite move, saying he would resign (boring!) if eurobonds don’t happen quickly.

In other continental news, the Bank of Spain said the country’s recession deepened in Q2, while Evangelos Venizelos (Remember him? He’s one of the 725,000 former Greek Ministers of Finance) said Greece needed an urgent liquidity fix and the recession is worsening by the minute. Italy is getting a taste of Spain’s banking problem, with UniCredit’s shareholder Pamplona Capital increasing their stake by 3%. UniCredit is the country’s largest bank and pan-European banking group and was the worst performing stock across Europe at certain times this month. Over the last 12 months, it lost almost 73% in value on the Milan stock exchange. Ouch.

But most importantly, we got a new acronym!!! Indeed. And it is unrelated to Greece, although its draws from it for inspiration. Take is away, Alphaville

Just when you had had enough of Grexits, Greuros and Drachmageddons, here’s another irritating term to add to the eurozone crisis lexicon: Brixit. Yes, the genius fusion of the words Britain and exit to describe another gloomy scenario.

How realistic a Brixit is remains up for discussion. Despite all the whining and finger-pointing, I’m pretty sure the UK wouldn’t be the first to jump off the sinking ship.

Mervyin King of the Bank of England, however, provides ammunition by saying that the UK is not even half way through crisis brought to us live from across the Channel. read article

Meanwhile in the US, the American housing market is sort of alive and kicks a bit as well, with the largest number of new home sales in the last two years recorded this week and prices rising. But not so fast, says MarketBeat

“But before we bust out the pom-poms,” says MarketBeat, “let’s remember housing has exhibited many head fakes throughout its fitful recovery.”

Think of how long this is taking. Think of the US economy. And now think of how that’s going to look in Spain. Summer house, anyone? read article

The potential demerger of Newscorp into two separate divisions is likely to be decided on over the course of the day. Holding 40% in each division, the Murdoch family would remain in control of both. In the meantime, Dealbook dives into the numbers. read article

And finally a short read for the how-to-be-a-banker book (chapter 7: don’ts): enter Sheldon Maschler. read article

So long.


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