FinancialGuy Writes!

“Left to themselves, the Europeans run the risk of becoming absorbed by their internal social concerns. Europe’s economic recovery has obscured the longer-run costs of its seeming success. These costs are damaging economically as well as politically. The crisis of political legitimacy and economic vitality that Western Europe increasingly confronts – but it unable to… » read more

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When Confidence Is Lost

So the eurozone crisis is back with full force. Did it ever really go away? I don’t propose to try and recap the events of the last few days in Cyprus with the bail-in of bank depositors, things are moving quickly enough that I would be out of date almost immediately. Instead, let’s focus briefly… » read more

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“I believe that right now we are sleeping on a volcano … can you not sense, by a sort of instinctive intuition, that the earth is trembling again in Europe? Can you not feel … the wind of revolution in the air?” Alexis de Tocqueville (1805 – 1859)

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It is a long time since I last made a financial prediction in print, but I feel a need to make one now. The previous ones can be found here and here. Regular readers might recall that I have been confused about the state of the economic world for a while and how and why… » read more

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Is Disaster The New Normal?

Where has the volatility gone in financial markets? Why is the current political situation not causing mayhem? Over the last few weeks I have been developing a theory about the current state of financial markets. The theory isn’t fully fleshed out, despite my efforts, but I hope that by explaining my thinking here I can… » read more

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Corruption amongst public officials is never nice, but it seems that suddenly it is everywhere. Amongst the recent news I have seen references alleging: – Slovenian politicians not declaring their incomes – Greek politicians overlooking tax evading family members on the “Lagarde list” – Spanish politicians apparently receiving extra cash each year – the suspension… » read more

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A Politician Is Not A Country

Today I plan to ask a simple and somewhat rhetorical question. It relates to the recent movements in the eurozone crisis and their relationship to German politics. If you have been following the eurozone crisis, you might have noticed that the pressure on Greece seems to have eased. A few months ago it seemed to… » read more

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Over the last few days, it seems to me as though the eurozone crisis has become much worse. Please don’t misunderstand me, there hasn’t been another bailout an it was hushed up … the Netherlands didn’t request help, no. Instead, there has been something of an unstitching behind the scenes. If I think back to… » read more

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My local chip shop is owned by a Londoner called Andy. A couple of days ago I found myself being talked to by him about the Premiership. I don’t follow football all that closely, but he and I support the same team so there is a very real but limited amount of kinship between us.… » read more

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Despite having some time on my hands to think, I am still baffled by the current state of the markets. Firstly, despite all the potential risks facing the global economy (Greece, Spain, Italy, the US financial cliff and a slowdown in China) stock markets seem to be surprisingly buoyant. Dare I say rosy…? Who knows… » read more

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There have been a couple of legal challenges made to the European Stability Mechanism. The challenge in Ireland seems to have been brushed aside but there is still, of course, an appeal to be heard. Even so, the progress of the ESM seems to be pretty smooth. Yesterday, however, the German Constitutional Court decided to… » read more

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If ever there was a demonstration that “light-touch” regulation of financial firms has not been a great success, this week has been it. Over the years, we have heard huge amounts from the banking sector about how they are competent to regulate themselves. The fact that many governments have agreed and let them get on… » read more

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In the end, a vote in favour of the Fiscal Compact of just over 60% looks like Ireland was almost in agreement. If nothing else, the vote shows just how far the eurozone crisis has come and how meaningless many of the measures to date have been. When the Fiscal Compact was first announced and… » read more

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What About Cyprus?

It seems that as the days pass, more and more officials are openly discussing a Greek exit from the euro. Now that this sort of momentum is building it is impossible to see any other course of action. I first wrote about a Greek exit here all the way back in May 2011. It was… » read more

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In my last post (What Is The Cost To Europe Of Individual Actions?) I looked at the apparent movement of money out of Greece and into potentially safer locations. That is, of course, only one form of individual action. This weekend has seen another sort of individual action which has the collective power to cause… » read more

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This week provided a stark reminder that “markets” are not as perfect as we might hope. The double-whammy of the Dutch government falling and Nicolas Sarkozy narrowly losing the first round presidential vote sent markets sharply down. Yet, for those of us that follow politics and policy, weren’t these reasonably predictable events? The polls had… » read more

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