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Tag Archives: Europe

In Escalation of Trade War With Switzerland, EU Risks Balkanizing Europe’s Financial Markets

“Weaponizing” Europe’s financial services, with an eye on the UK after Brexit? By Nick Corbishley, for WOLF STREET: In recent days, the stock exchanges of Switzerland, the fourth-largest European market by value-traded, were dealt what seemed at first like a hammer blow: Brussels stripped them of financial equivalence with the European Union after a previous trade agreement between the two sides expired, with the result that traders from the EU’s 28 member states are no longer allowed...

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Negative-Yielding Junk Bonds Have Arrived in Europe

NIRP is systematically rotting out basic brain functionality. Amid rampant market expectations of another and even bigger and grander round of QE by the ECB, which would also be buying corporate bonds and old bicycles, the total amount of bonds with negative yields has risen to nearly $13 trillion, according to Bank of America Merrill Lynch. The perversion of negative interest rates imposed by central banks such as the ECB, the Bank of Japan, the Swiss National Bank and a slew of...

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Liquidity Fears Hit Other UK “Equity Funds” as Investors Remain Trapped in Woodford Fund

Shares of one fund plunged 22% on Friday. Other funds under pressure, raising serious questions about just how liquid “equity funds” in the UK are. By Nick Corbishley, for WOLF STREET: There’s still no sign of relief for the hundreds of thousands of investors whose money is trapped in one of the UK’s biggest equity funds, the Woodford Equity Income Fund. The fund is supposed to offer its shareholders daily liquidity, meaning they can take part or all of their money out any day of the...

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Diesel Death-Spiral Drives UK Auto Sales to Five-Year Low

“Decline in buyer confidence,” collapsing sales of diesels & plug-in hybrids. But EV sales soar. By Nick Corbishley, for WOLF STREET: Sales of new passenger vehicles, as measured by registrations, fell 4.9% in June from a year earlier in the UK, according to the Society of Motor Manufacturers and Traders (SMMT). The UK is the second largest auto market in the EU, behind Germany. Total sales in the first half of 2019 dropped 3.4% year-over-year, driven by the ongoing collapse in...

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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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