European Reality Check

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Carmen Reinhart said:
...
We’ve not mentioned Italy, and that brings us to the euro zone. This is very, very destructive within the euro zone. If it drags on, the forces that are pulling the euro zone apart are going to grow stronger and stronger.
...
I actually wanted to go back to the Italy issue. If you look back to 2008-09, nearly everybody had a banking crisis. But a couple of years later, the focus had moved from the banking problem to the debt problem. And it was the peripheral Europe debt problem with Portugal, Ireland, Iceland—most notoriously Greece—having the largest, by a huge margin, IMF programs in history. I would point out that Greece, Ireland, and Portugal combined are a little over a third of Italian GDP. And if there’s a shakeout that involves concerns about Italy’s growth, then we could have a transition again from the focus on the Covid-19 crisis this time to a debt crisis. But Italy, as I said, is on a different scale than the peripheral countries that got into the biggest trouble in the last crisis. It potentially also envelops Spain. So I think that if you were to ask me about an advanced economy debt issue, I think that is where it is most at the forefront.
...
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https://www.bloomberg.com/news/feat...ts-this-time-really-is-different?srnd=premium
 
...
The ECB, as expected, boosted the size of its Pandemic Emergency Purchase Program on Thursday, saying the envelope for asset purchases was increased by €600 billion ($674.5 billion), to €1.35 trillion euros.

The PEPP is now set to run through at least the end of June 2021, versus the end of 2020, while maturing principal payments from assets purchased under the plan will be reinvested until at least the end of 2022, the ECB said.

The action comes after ECB President Christine Lagarde downgraded the central bank’s eurozone gross domestic product estimate to a decline between 8% and 12% this year. ...
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www.marketwatch.com

Gold marks first gain in 4 sessions on weakness in U.S. dollar and stocks

Gold prices rise on Thursday, posting their first gain in four sessions, buoyed by some weakness in the U.S. stock market and dollar, as investors digested...
www.marketwatch.com www.marketwatch.com

It seems all the major central banks are going brrrrt. No (digital) ink left behind.
 
aaahhhh

Germany is ready and able to spend when it matters,
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so seeing as they will get the lions share of the stimulus, its all good 🙃

www.reuters.com

Germany finally splurges, but not without fresh criticism

Under pressure from its European peers for years to spend more, Germany has finally served up a bumper stimulus package financed with new debt, but Berlin's rediscovered love to splurge is causing fresh unease among its neighbours.
www.reuters.com www.reuters.com
 
lulz...

Mario Draghi has accepted the toughest job in European politics—prime minister of Italy—and he must now find out whether he will be supported by enough of the country’s many political parties to be able to count on a parliamentary majority. The former president of the European Central Bank, often dubbed as “the man who saved the euro” from its worst crisis back in 2012, is on paper the best qualified by far of the possible candidates.
...
Draghi will be the best placed to explain to Italian politicians how to steer Italy out its current pandemic crisis, and beyond how to reform it and make it grow at last. He outlined a plan in an article published last year, calling for “a change of mind-set as necessary in this crisis as it would be in times of war.”

Governments, he wrote, should step up massively without concern at this stage for rising debt levels. “The alternative—a permanent destruction of productive capacity and therefore of the fiscal base—would be much more damaging to the economy and therefore to government credit,” he argued then.

The article was published nearly a year ago. Since then the pandemic has worsened. In its latest forecast, the International Monetary Fund saw the Italian economy growing 3% this year after slumping by 9% in 2020—one of the worst recessions in Europe one year, to be followed by one of the slowest rebound the next.

But if he succeeds in forming a government—for now, a big if—Draghi may be able not only to change Italy, but also the way the EU does business. The presence of an undisputed heavyweight in the meetings of EU heads of states and governments will change the EU balance of power, long dominated by the Franco-German duo. And his mastery of economics and monetary matters—which, to say the least, dwarfs that of German Chancellor Angela Merkel and French President Emmanuel Macron—could fast make him one of the most authoritative voices around the leaders’ table

Finally, Italy’s presidency of the G20 group of industrialized nations this year will give Draghi the exposure he needs to steer global economic cooperation. If party politics allow, Italy hasn’t only found a prime minister. Europe may also have found an influential leader.
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www.marketwatch.com

How Mario Draghi Could Change Italy—but Also Europe

The presence of an undisputed heavyweight in the meetings of EU heads of states and governments will change the EU balance of power, long dominated by the...
www.marketwatch.com www.marketwatch.com
 
Curious how democracy is so easily set aside ..........
Did anyone vote for Draghi ???

Wouldnt they be better off with a brain dead old white fella like they just 'elected' in the USA ?

oh wait ........
 
* bump *

www.trustnodes.com

ECB Now Owns 80% of the Eurozone

The balance sheet of the European Central Bank (ECB) has risen to 77% of the Gross Domestic Product (GDP) of Eurozone which includes Germany, France,…
www.trustnodes.com www.trustnodes.com

Will comment later. On my phone right now and saving the link.
 
The balance sheet of the European Central Bank (ECB) has risen to 77% of the Gross Domestic Product (GDP) of Eurozone which includes Germany, France, Italy and Spain.

ECB’s balance sheet has risen to €7,657,629 million, not far off from doubling in 2020 from about €4.7 trillion.
...
Now more than a year on, the economy is not seeing much growth with ECB picking up the tab to monetize assets which eventually it may have to unload.

This €7.7 trillion in ECB’s balance sheet is debt that must be repaid, with the vast majority of the debt being government debt which is sold to commercial banks and then bought off them from the central bank.

Interest rates are near zero however currently, and in some euro states they are even negative, so this arrangement for now probably won’t cause any political problems.

However if interest rates need to be increased due to a rise in the velocity of money, and thus inflation, the funneling of taxpayer money to the private banking sector based on printed fiat from nothing by ECB may raise difficult equitable considerations.
...
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This somewhat puts Luongo's thesis regarding Basel 3 into perspective.
 
I dont think rational folk see the attraction of major conflict based on the US wanting to supply europe with expensive LNG and Russia happy and easily able to supply their energy needs.

Its a pretty blatant play by the US and as more folk wake up to the lies of the control system, it gets harder to convince us that WW3 is necessary.
 
* bump *

The eurozone credit crunch has begun in earnest. Lending conditions across the currency bloc are the tightest since late 2012, when the region was still crippled by the sovereign debt crisis.

The European Central Bank’s lending survey (BLS) is a leading indicator of what is to come. Both the supply and demand for credit definitively buckled in the third quarter, even if the eurozone economy eked out a last gasp of legacy growth. Lending is deteriorating most rapidly in Italy and Spain.
...
Zero rates, QE, and targeted longer-term refinancing options during the deflationary era masked the fundamental clash of interests over eurozone destiny. Double-digit inflation has shattered the truce.

German-led hawks on the ECB’s governing council are demanding the start of quantitative tightening (QT) by January: the German government is digging in its heels over joint financing for the energy bailout, and it wants to reimpose strict limits on fiscal deficits under the Stability Pact.

This battle will determine whether or not the eurozone crosses the line into a full debt union, either via camouflaged ECB funding or via a fiscal merger that eviscerates the budgetary sovereignty of national parliaments. Inflation and the violent repricing of global yields make it impossible to fudge the matter for much longer.
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More (long):

www.telegraph.co.uk

Europe’s next debt crisis is only just beginning – tearing North and South apart

Read this exclusive extract from our Economic Intelligence newsletter and sign up at the bottom of the article to get it every Tuesday
www.telegraph.co.uk www.telegraph.co.uk
 
www.reuters.com

ECB set to raise deposit rate 50 bps as euro zone enters recession -economists

The European Central Bank will press on with policy tightening, adding 50 basis points to its deposit rate next month as it worries rapid price growth is becoming entrenched, despite the bloc almost certainly entering recession, a Reuters poll found.
www.reuters.com www.reuters.com

www.reuters.com

Euro zone must keep investing during slowdown, help ECB fight inflation -Commission

Euro zone governments should coordinate fiscal policies for 2023 so as not to clash with the European Central Bank's efforts to curb inflation and should keep up investment during the expected economic slowdown, the European Commission said on Tuesday.
www.reuters.com www.reuters.com
 
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Europe is facing a mounting diesel crisis as a strike at one of the largest refineries on the continent begins, reported Bloomberg. The combination of a labor action - depleted crude product stockpiles - and the EU preparing to choke off Russian supplies might be a toxic cocktail for the EU and could worsen the energy crisis.

Dutch unions appear to have stopped the restart of production units at BP Plc's refinery in Rotterdam after a technical issue brought fuel production to a standstill last week. The refinery processes 400,000 barrels of oil annually and is a top supplier of diesel to Northern Europe.

A spokesperson for one of the unions, CNV Vakmensen, told Bloomberg that workers wouldn't restart production unless a pay dispute is resolved.
...
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Labor Strike Begins At Major European Oil Refinery | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com
 
finance.yahoo.com

Easing euro zone downturn offers hope of milder recession

LONDON (Reuters) -The downturn in euro zone business activity eased slightly in November offering a glimmer of hope the expected recession may be shallower than feared, but consumers still cut spending amid a cost of living crisis, a survey showed on Wednesday. There has been mounting evidence...
finance.yahoo.com finance.yahoo.com
 

ECB Preview: Towards Restrictive​

by Rebecca Tomes | Dec 12, 2022

By Konstantin Veit, Portfolio Manager at PIMCO​

Summary:

  • Inflationary pressures remain elevated and we believe the European Central Bank (ECB) will hike policy rates 50 basis points at its December meeting, and indicate that it expects to raise interest rates further.
  • We expect the Governing Council (GC) to make clear that a neutral policy setting might not be appropriate in all conditions, and expect a transition towards moving in 25 basis point increments next year, as the hiking cycle pivots from policy normalisation to policy tightening.
  • On Thursday, the ECB will also release key balance sheet reduction principles, with the most likely implication being a passive reduction of its standard asset purchase program (APP) holdings, starting around Q2 next year.
  • We expect the ECB’s projections for the 2024 core and headline inflation numbers to have changed minimally compared to September and therefore remain somewhat above target, while the inaugural 2025 inflation projections will likely be very close to the ECB’s 2% price stability objective.


ifamagazine.com

ECB Preview: Towards Restrictive - IFA Magazine

Summary:
ifamagazine.com ifamagazine.com
 
All this esoteric banker talk... But what about Hans and Erika? They have no job, now. They cannot afford to heat their house because of the exploding costs.

Civilization is chained together. 100 people work in a factory, which supplies... oh, say, shoes or food or cars.

The factory cannot get the raw materials and the gas needed to manufacture their product, so they downsize or go out of business. Either way 80 to 100 people now have no income. That means they do not buy shoes, TV's, or eat out in restaurants.

The shoemakers and the TV sales stores and the restaurants close/cut back. More people are now out of the money-loop.

And people are smoothly talking about "basis points" as if it is an insulated world, far away from the gritty streets.

Take note: WINTER BEGAN on December 21. <-- This winter will be crushing for the German people. In every way.
 
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Unca Walt said:
All this esoteric banker talk... But what about Hans and Erika? They have no job, now. They cannot afford to heat their house because of the exploding costs.

Civilization is chained together. 100 people work in a factory, which supplies... oh, say, shoes or food or cars.

The factory cannot get the raw materials and the gas needed to manufacture their product, so they downsize or go out of business. Either way 80 to 100 people now have no income. That means they do not buy shoes, TV's, or eat out in restaurants.

The shoemakers and the TV sales stores and the restaurants close/cut back. More people are now out of the money-loop.

And people are smoothly talking about "basis points" as if it is an insulated world, far away from the gritty streets.

Take note: WINTER BEGAN on December 21. <-- This winter will be crushing for the German people. In every way.
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They can stay warm and comfortable knowing that their masters in government have their backs. :ROFLMAO:
 
Found this site with an interactive (customizable) graph of euro nat gas prices:

EU Natural Gas - 2022 Data - 2010-2021 Historical - 2023 Forecast - Price - Quote

Dutch front-month gas futures were at €83/MWh in the last week of the year, close to their lowest level in 6-1/2 months and following a 28% drop in the previous week, amid mild weather and ample supplies. Natural gas prices in Europe are more than 75% below record levels of nearly €350 hit in...
tradingeconomics.com tradingeconomics.com

Price of nat gas still elevated over 5 year average before Russia-Ukraine war, but it has come down significantly from the high point.
 
Useful source of info there Bug.
Interesting looking at 10 year charts of things like lumber, propane, Uk electricity and other resources that have been somewhat elevated recently and a lot of em are coming back down to more managable numbers ........
Must be the great die off reducing demand 🤡
 
searcher said:
gcaptain.com

UK Oil Lobby Warns Financing May Dry Up After Windfall Tax

By William Mathis (Bloomberg) — Banks are set to trim billions of pounds in financing for oil and gas producers in the UK’s North Sea after a windfall tax was imposed...
gcaptain.com gcaptain.com

www.bbc.com

Energy giant ExxonMobil sues EU to block energy windfall tax - BBC News

The US company says the levy on its profits will discourage future investment in Europe.
www.bbc.com www.bbc.com
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Cuttin' down the fargin tree to get the apples on top.
 
From Searcher's link:
...
The 27-country bloc fears that Washington's $430 billion (400 billion euros) Inflation Reduction Act (IRA) with its generous tax breaks may lure away EU businesses and disadvantage European companies, from car manufacturers to makers of green technology.
...
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Climate Rules Are About to Become Real for International Trade​

With the introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM), trade rules based on the carbon footprint of goods move from theory to practice. In December 2022, EU institutions reached overall agreement on the CBAM regulation, which will come into force later this year.

The CBAM’s purpose is to prevent the risk of carbon leakage, which can arise when differences in climate policy make it cheaper to produce carbon-intensive products in one country compared to another.

The EU operates an Emissions Trading System (ETS) that caps overall emissions from covered sectors such as energy, heavy industry and aluminium production. Within the cap, emitters must surrender to the regulator enough emission allowances to cover their total emissions. Emitters can buy and sell allowances for this purpose. The EU allowance, representing one tonne of CO2 equivalent, has recently been trading at around $85.

Full article here:

maritime-executive.com

Climate Rules Are About to Become Real for International Trade

In 2023, climate rules in international trade become real.With the introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM), tra...
maritime-executive.com maritime-executive.com
 
pmbug said:
...
Price of nat gas still elevated over 5 year average before Russia-Ukraine war, but it has come down significantly from the high point.
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Prices still coming down:
The price of Dutch front-month TTF Natural Gas Futures – a benchmark for northwest Europe – plunged 15% today to €54.85 per megawatt-hour (MWh), and has now collapsed by 84% from the crazy spike in the summer of 2022. The price is now back where it had first been in early September 2021 ...
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wolfstreet.com

Natural Gas Futures in Europe Plunge 15% Today, Down 84% from Crazy Spike

LNG Glut in China, suddenly?
wolfstreet.com
 
finance.yahoo.com

ECB set to raise rates by 0.5% in Feb and March, Knot says

The European Central Bank (ECB) is set to raise interest rates by 50 basis points in both February and March and will continue to raise rates in the months after, ECB governing council member Klaas Knot said in an interview with Dutch broadcaster WNL on Sunday. "Expect us to raise rates by 0.5%...
finance.yahoo.com finance.yahoo.com

think.ing.com

Key events in EMEA next week

In Poland, we estimate that December unemployment inched up to 5.2% for seasonal reasons though the labour market remains strong. Inflationary pressure…
think.ing.com think.ing.com
 
The average temperature in Dresden in February is 31F, snowing 24% of the time. February will arrive on schedule.

The avoidance of noticing the real pain can be seen in the still glib "they have successfully tightened their belts" advertisement stage; no longer mentioning the closing of the restaurants, etc. due to power costs.

If you have only listened to Reuters "Exclusive report" and did not live in a building that is heated tonight... and you (following their rules) have not had a bath this week, and you do not know how to pay the rent because you lost your business...

Why, if you did not actually LIVE IT, you might think Reuters is reporting that all is well and the problems are all in hand and solved.
 
Unca Walt said:
The average temperature in Dresden in February is 31F, snowing 24% of the time. February will arrive on schedule.

The avoidance of noticing the real pain can be seen in the still glib "they have successfully tightened their belts" advertisement stage; no longer mentioning the closing of the restaurants, etc. due to power costs.

If you have only listened to Reuters "Exclusive report" and did not live in a building that is heated tonight... and you (following their rules) have not had a bath this week, and you do not know how to pay the rent because you lost your business...

Why, if you did not actually LIVE IT, you might think Reuters is reporting that all is well and the problems are all in hand and solved.
Click to expand...


"All is well." "We have the situation under control."

So say the elites as they turn their thermostats up.


nothing to see.jpg
 
finance.yahoo.com

Rising interest rates have a sting in the tail for Europe's banks

Rising borrowing costs are giving a long-awaited lift to Europe's beleaguered banks, but they come with a sting in the tail. Last year central banks ended a decade of rock-bottom interest rates as the U.S. Federal Reserve and then the European Central Bank moved towards tightening. Two of...
finance.yahoo.com finance.yahoo.com
 
Dang! You'd almost think this was a conspiracy theory! Yet here we are!
 
iu


<went searching for a gif on bubbles popping, found this, and laughed>
 
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