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’This is not normal ECB tightening
In which ‘strong vigilance’ = ‘token gesture’.
Three charts on the European Central Bank and the euro periphery, from Credit Suisse’s global equities team on Monday:
US deleveraging and consumption, in progress
There was some good news in this morning’s Personal Income and Outlays report for January, though not quite enough to get excited about.
Personal income climbed 1 per cent, well above expectations, and the savings rate increased for the first time since last July,
The ‘depreciation doomsday machine’
There are prognostications of doom for the US economy, and there are highly specific prognostications of doom for the US economy.
Here is one, from Charles Dumas of Lombard Street Research:
The potentially
Mervyn explains himself
What he actually said:
Dear Chancellor,
As I have described in previous open letters, three factors can account for the current high level of inflation: the rise in VAT relative to a year ago, the continuing consequences of the fall in sterling in late 2007 and 2008,
Household deleveraging continues, sort of
From the FRBNY’s Q4 report on household debt and credit:
We recently commented at length about the declining savings rate and the consumer-spending-led rebound that was taking place, even as households continued to delever.
The Bank of England’s big dilemma
All eyes on the Bank of England ahead of Thursday’s rate decision.
With inflation persistently above the Old Lady’s target, and with a couple Monetary Policy Committee members voicing their dissent over recent rate decisions,
Household deleveraging and consumer-led growth
The onslaught of chart porn begins with the changes in the US personal savings rate for the last five years, updated to reflect Monday’s income and outlays report from the BEA:
The decline in the December savings rate,
On not accepting QE3, with Bob the Bear
Remember when Bob the Bear went bullish?
Bob Janjuah and Kevin Gaynor — global macro strategists formerly of RBS, now based at Nomura — said in October that markets were set to turn strongly ‘pro-risk’,
The problem with Europe’s bail-ins
Here’s something to ponder while we wait for the European Commission’s consultation document on haircuts for senior investors in Europe’s banking debt.
It’s what all this talk of Basel III — plus burdensharing,
Eschatology in the market
Who knows: 2011 might just be an all right year for risk assets, especially if there’s a second stimulus goin’ round.
But how about that 2012 thing, eh?
This rang a little odd in an otherwise ‘stay overweight’ equities call from Credit Suisse strategist Andrew Garthwaite and his team:
€1,650bn of pain for Europe’s peripherals, Credit Suisse says
Want an interesting estimate for the cost of fixing peripheral Europe?
Credit Suisse’s Andrew Garthwaite & Co. are here to serve.
They reckon that total bank losses in Spain, Greece, Ireland and Portugal have so far been about €140bn — or 8 per cent of GDP.
A different way of looking at debt – and the developed world
Matt King — the god of credit strategy at Citigroup — has a block-buster note out on debt — tackling everything from balance sheet recessions to bubbles and busts.
Let’s start with the basics; what does Matt King reckon debt has to do with current market uncertainty? As it turns out — a lot.
Global imbalances? Blame the west
Independent Strategy have never been ones to mince words.
On Friday they’ve tackled the thorny issue of currency wars and global imbalances. It’s a topical debate given that US Treasury secretary Tim Geithner suggested earlier this week that G20 members (ahem,
Moody’s looks to Finland – to explain Ireland, Spain
Want to know the shape of things to come in Ireland? Spain?
Look no further than … Finland.
That particular Nordic nation experienced an almighty financial boom in the 1980s. In 1990 came the the bust — led by a slowdown in the global economy,
BarCap predicts Europe’s distressed debt destiny
Whither all those rubbish European bank assets?
There are plenty of soured loans lingering in the system, on top of a €500bn-outstanding leveraged loan market still being shaken out.
Barclays Capital believes both these things could be the foundation for new European distressed debt market. And it starts around now.
Why haven’t there been more bankruptcies?
This chart below, courtesy of The Economist, raises a puzzling question as much as it depicts a worrisome trend (though it does that too):
The Economist writes that bankruptcy filings in the US climbed by 20 per cent in the year through the end of June,
Get ready, get set, deleverage! With one notable (US) exception
Here’s something for the weekend — a nice overview of US debt, courtesy of BNP Paribas.
The idea is to look at all forms of American debt, private as well as government.
As you can see from the below charts,
The giant sucking sound of US private sector credit contraction
BNP Paribas analyst Julia Coronado highlighted an overlooked and significant aspect of the Fed’s latest flow of funds report, that of private sector deleveraging.
As she put it in a note released on Friday (emphasis FT Alphaville’s):
Don’t worry about deleveraging…
… says Goldman Sachs.
The rather dramatic drop in US consumer credit outstanding has sparked yet another recovery debate, with many claiming the global economy will be unable to get back on its feet without consumers going back to their old,