While the nation’s largest banks were publicly reassuring nervous investors of their stability during the height of the financial crisis, they were also quietly approaching the Federal Reserve, hat in hand. The total price tag: $7.77 trillion, many times the amount of the better-known TARP bailout. A win in court against a group representing the [...]
…investors would start demanding compensation for possible exchange rate risk in the form of higher interest rates on public and private debt in other vulnerable countries that remain members of the euro area. There would also be strong incentives for households and businesses to withdraw deposits from these vulnerable countries, creating a potential for bank [...]
Contingency planning is in progress throughout Europe. From the UK Treasury on Whitehall to the architectural monstrosity of the Bundesbank in Frankfurt, everyone is desperately trying to figure out precisely how bad the consequences might be. What they are preparing for is the biggest mass default in history. There’s no orderly way of doing this. [...]
Prepare for riots in euro collapse, Foreign Office warns Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash. A senior minister has now revealed the extent [...]
As the unthinkable looms, ministers are starting to prepare for the worst. Our banks have reduced their exposure to countries such as Greece, but a widespread panic and credit freeze involving Greece, Spain, Italy and even France is bound to reduce the amount available for lending. There is also the potential for social unrest: embassies [...]
…some analysts have not ruled out the possibility of a global economic collapse in 2012. “History is replete with examples that indicate once a nation reaches a debt to GDP ratio of between 90-100 percent, two pernicious conditions begin to appear,” he said. First, public debt drains capital from the private sector, which stymies economic [...]
Credit rating agency Moody’s cut Hungary’s debt to “junk” grade late on Thursday, dealing a blow to Prime Minister Viktor Orban’s unorthodox economic policies and prompting his government to denounce the move as a “financial attack.” Moody’s cited rising uncertainty about Hungary’s ability to meet fiscal goals, high debt levels and what it called increasingly [...]
Russia’s central bank refrained from cutting interest rates as Europe’s debt crisis exacerbates a cash shortage in the economy, putting pressure on policy makers to keep a grip on capital outflows. The cost of insuring against default on European financial- company debt rose to a record, according to traders of credit- default swaps. Of the [...]
One of the longest running conspiracy theories in the global mindset is that the banking cartels would like nothing more than to control the economic and social domains of nations through a centralized authority, which would then be run by a select few. On November 24th, this theory may have finally come out of the [...]
#2 Willem Buiter, chief economist at Citigroup: “Time is running out fast. I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging [...]
An auction of German government bonds technically failed Wednesday, underlining fears that Europe’s long-running sovereign debt crisis now threatens the core of the euro zone. “It was awful,” said Nick Stamenkovic, fixed-income economist at RIA Capital in Edinburgh. “It just shows that investors are not only shying away from [peripheral] euro-zone bonds,” but are turning [...]
Oil dropped from a three-day high in New York as a shortfall of bids in a German bond sale signaled a deepening of Europe’s debt crisis and slowing economic growth in the region. “Europe’s core is under attack,” said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, who correctly predicted this month that [...]
Responding to Washington’s failure to bring Russia on board the European missile defense system, President Dmitry Medvedev announces sweeping plans to address what Moscow is calling a threat to national security. Medvedev said he will deploy strike systems in the west and south of the country and deploy Iskander missiles in the Kaliningrad region in [...]
