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Tag Archives: Europe

And the US Dollar’s Status as Global Reserve Currency?

Renminbi gains, but in painfully slow micro-steps. Dollar & euro combined share slides. How long can the US dollar maintain its status as the global reserve currency and as global hegemon?  That’s a question that comes up a lot, particularly among people who’d like to see it knocked off its perch. So here we go. Total global foreign exchange reserves in all currencies ticked up to $11.4 trillion in the first quarter 2019, according to the IMF’s just released COFER data....

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No, Rate Cuts Were Not Discussed: ECB Insiders Out Draghi as Fabricator & Schemer, and Talk to Reuters

Draghi’s shenanigans get hilarious, months before his term ends. So here’s ECB President Mario Draghi, whose term ends in October, and he’s at the ECB Forum in Portugal, and in a speech on Tuesday titled innocuously, “Twenty Years of the ECB’s monetary policy” – so this wasn’t a press conference after an ECB policy meeting or anything, but a speech on history at an ECB Forum – he suddenly threw out a whole bunch of stuff… How, “in the absence of improvement” of inflation, “additional...

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Bad Loans Still Too High at Eurozone Banks, ECB Warns

NPLs remain dangerously to catastrophically high in Italy, Greece, Portugal, and Cyprus. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. The bad-debt problem at banks in the Eurozone, an ongoing legacy of cascading loan defaults during the last financial crisis, may have grown smaller overall in recent years but it’s still a major cause for concern. That was the basic thrust of a speech delivered by Andrea Enria, Chair of the Supervisory Board of the ECB, on Friday....

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Inspired by Deutsche Bank Death Spiral, European Banks Sink to Dec 24, 2018 Level – First Seen in 1995

The benefit of NIRP: There’s hell to pay – even the ECB admits it. European bank shares – which have been getting crushed and re-crushed for 12 years – are getting re-crushed again. On Friday, the Stoxx 600 Banks index, which covers major European banks, including our hero Deutsche Bank, dropped to an intraday low of 130.5 and closed at 131.2, thereby revisiting the dismal depth of December 24, 2018 (130.8). European banks did not soar on the first trading day after Christmas, unlike...

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UK Government Blew Billions on “Help to Buy” Scheme that Enriched Home Builders and Drove Up Home Prices. Taxpayers on the Hook When Prices Sink, New Report Warns

But it helped high-income people buy homes. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. The UK’s government’s flagship “Help to Buy” equity loan scheme, launched ostensibly to give cash-strapped first-time buyers a leg up onto the property ladder, has dished out billions of pounds of publicly subsidized loans to relatively well heeled homeowners who were perfectly capable of buying their first property without need for outside help, asserts a new report by the...

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About this Biggest Plunge Since 2002 in Manufacturing in the UK

It was a doozie, but it shouldn’t have come as a surprise. Here’s why. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Production output in the UK dropped by 2.7% in April from March, and GDP fell by 0.4% in just one month, according to the latest figures by the Office of National Statistics. The manufacturing sector provided the largest contribution to the downturn, with the manufacturing index plunging 3.9% in April, from March, its biggest monthly fall since June...

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Another UK Outsourcing Giant Teeters, Collapsed Shares Add to Woes of Woodford Fund that Just Froze Withdrawals

Kier shares are one of the biggest holdings of Woodford Equity Income fund. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. UK construction and services giant Kier Group, with 20,000 employees, is on the ropes after issuing a profit warning, amid worries about its debt, that sent its shares spiraling down 40% on Monday and a further 2% on Tuesday, and another 4% so far today to 154 pence. The stock is down 56% over the past month and 85% over the past year and is now...

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US Cleanest Dirty Shirt Among Manufacturing Giants: Germany at Crisis Level. China, Japan, South Korea Contract

Exports-at-all-costs for economic growth comes home to roost. Manufacturing in the biggest manufacturing countries, particularly those focused on exports, has hit various levels of malaise, ranging from slowing growth to panic-inducing decline, according to the manufacturing Purchasing Managers Indices for May released on Monday. The PMI data shows that in the US, manufacturing is growing more slowly, but it’s still growing, and so the US continues to be the cleanest dirty shirt in...

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Italian Banks Are At It Again, Shares Re-Crushed

What to do with those messy banks ignites further tensions. By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. The Italia All Share Banks Index dropped 18% so far in May, almost double the 10% fall registered by the Euro Stoxx 600 banking index during the same period: Italy’s biggest bank, Unicredit, saw its shares fall through the €10 level for the third time this year. The stock has lost 20% of its value in May, and is close to its all-time low, registered in July...

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Busted Housing Bubble 1 Morphs into Housing Bubble 2 in Spain?

Madrid, Barcelona, other markets are well on their way. But some markets are still crushed. Spain’s last epic housing bubble, one of the biggest in living memory, propelled median home prices to €2,100 per square meter, at which point the bubble began to burst. The national median price eventually plunged 31%, according to government data, as Spain’s financial system began to collapse only to get bailed out by an international aid package. The long-drawn-out event wreaked all kinds of...

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