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Tag Archives: Italy

Why Portugal Matters

Summary: DBRS reviews its investment grade rating of Portugal on Oct 21. A cut in its rating would have far reaching implications. A cut in the outlook is more likely than a cut the rating. Many observers continue to tout Italian risks as the greatest in the euro area into the year end. The constitutional referendum that would emasculate the Senate, and end the perfect bicameralism that has contributed to...

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Will The ECB Buy Stocks?

Authored by Nick Kounis and Kim Liu via ABN AMRO, Debate about the ECB’s stimulus options have continued to rage, with an equity purchase plan mentioned as a possibility We think the ECB could legally buy ETFs that fit its requirements… … but it would be controversial and we question the benefits An ETF programme could total EUR 200bn, which would not be large compared to the overall QE programme …and assuming a...

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Is The US Dollar Set To Soar?

Which blocs/nations are most likely to face banking/liquidity crises in the next year? Hating the U.S. dollar offers the same rewards as hating a dominant sports team: it feels righteous to root for the underdogs, but it’s generally unwise to let that enthusiasm become the basis of one’s bets. Personally, I favor the emergence of non-state reserve currencies, for example, blockchain crypto-currencies or...

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FX Weekly Preview: Next Week’s Two Bookends

Germany The start of next week will likely be driven by Deutsche Bank’s travails and dollar funding pressures, which may or may not be related. The end of the week features the US monthly jobs report. Despite being a noisy, high frequency time series subject to significant revisions, this report like none other can drive expectations of Fed policy. Deutsche Bank is faced with two challenges: its business and several...

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Renzi and the Italian Referendum: Disruption Potential Minimized

Italian Prime Minister has set the date for the constitutional referendum as late as practically possibly.  It will be held on December 4.   The issue is the perfect bicameralism that gives as much power to the Senate as the Chamber of Deputies.  Renzi’s argument is that the political reform is necessary to make Italy governable.  Italy has had 63 governments since the end of WWII.  In order to address the economic...

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Negative and the War On Cash, Part 2: “Closing The Escape Routes”

Submitted by Nicole Foss via The Automatic Earth blog, Part 1 Here. History teaches us that central authorities dislike escape routes, at least for the majority, and are therefore prone to closing them, so that control of a limited money supply can remain in the hands of the very few. In the 1930s, gold was the escape route, so gold was confiscated. As Alan Greenspan wrote in 1966: In the absence of the gold...

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Scenarios for Italian banks’ bad loans

Our model suggests that the Italian government’s strategy for the bad debt problems of the country's banks only will only be credible if economic growth returns Changes in banks’ Non-Performing Loans (NPLs) depend crucially on economic performance, including GDP growth and employment. Put simply, the Italian government’s strategy, or hope, is that even a modest economic recovery leads to a sustained, albeit gradual decline in NPLs and that systemic bank bailouts can be avoided. Moreover,...

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US Futures Rebound, European Stocks Higher As Oil Rises

The summer doldrums continue with another listless overnight session, not helpd by Japan markets which are closed for holiday, as Asian stocks fell fractionally, while European stocks rebounded as oil trimmed losses after the the IEA said pent-up demand would absorb record crude output (something they have said every single month). S&P futures have wiped out almost all of yesterday's losses and were up over 0.2% in early trading. Europe's Stoxx 600 rose 0.4%  with miners and energy...

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