Death Star Economics



Greek/Portuguese debt cheaper, explosion NOT averted

Could it be that Europe is fixed? Probably not. But Greek bond yields fell to a new low since August 2011, far before the debt restructuring that caused such a headache in the beginning of the year, and Portuguese yields fell to their lowest since Spring 2011, when the country received a bailout.

In complete contradiction [maybe]: over the weekend, Sweden’s Finance Minister Anders Borg told the Telegraph that Greece was set to leave the monetary union. Last year, Q4 was all about the Grexit that wasn’t, I wonder if 2012 will bring the same tedious Christmas story.

Later today, we will see Italy’s debt levels for August, which may have risen even higher, says Bloomberg’s Linda Yueh. In July, Italy’s debt to GDP ratio had been 123.8%, amounting to 1.97tn of government debt.

Meanwhile, both Angela Merkel and Wolfgang Schaeuble try to hold it all together, rejecting the idea of uncontrollable events in Europe” and a Greek default respectively.

In Lithuania, which held general elections yesterday, voters rejected the incumbent administration that adhered to all EU austerity measures of the rainbow. The new government, will be a center-right coalition, looking to “ease the pain by raising minimum wage, shifting the tax burden towards the better off and postponing adoption of the euro.” read article

In the background, there are as many Spanish bailout rumors as on every Friday (leaving the potential decision to be made on the weekend) in the past month. In short, there’s enough going on in Europe to have your news source of choice pick up their live coverage. Reuters Guardian Telegraph

In the UKRichard Branson is taking another stab at buying a chunk of assets that RBS has to get rid of as part of its bailout deal. 316 branches, amounting to 250,000 business customers and 1.8 million retail clients, are up for sale – for a bargain. The package was meant to be sold to Santander for £1.65bn, but the buyer dodged the deal on Friday, blaming it on incompatible IT systems that took too long to integrate (there might be more to that story). Now the branches are up for sale again, for the bargain price of £1bn. Branson had bid for them before, but lost against Santander. Other bidders include private equity firm JC Flowers, which is trying to get its fingers on every minorly distressed financial asset in Europe. In January, Branson’s Virgin Money acquired Northern Rockread article

Alvin Roth (Harvard) and Lloyd Shapely (UCLA) have been awarded the 2012 Nobel Prize in Economics for their work in “the theory of stable allocations and the practice of market design.

Over the course of this week, we’ll see US retail sales (later today), eurozone inflation (Tuesday), UK unemployment (Wednesday) and Chinese GDP (Thursday).

So long.

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One Response

  1. princess1960 says:

    thank you
    EUZ nothing new the same not now but 3 y ..this is bad .
    R B Virgin -mean he is not good economic
    N Price every day one in the end me… ok concratulation to both ..
    MIN BORGe maybe is better to see how going the economy in not grow so …(better we have to see our home first)
    Schaeuble …a true he is very good economologos.
    and very strickt (i like)

    i wait for next post

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