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Despite the market ructions witnessed in February, nothing seems to deter investors for long. A strong cyclical backdrop and robust earnings growth seem to forever ratify the prevailing ‘Buy the Dip’ mentality. Yet, take a step back and you can … Continue reading
As the positions between the Greek government and the Troika harden, it appears that an agreement to extend the current bail-out program or secure some other form of official financing becomes ever more elusive. Yet, it is highly unlikely that … Continue reading
The Fed surprised markets with a more hawkish posture than expected, suggesting the start of QE tapering in late 2013 and completion by mid-2014. While Fed guidance may not ultimately come to pass, EM equity markets in particular remain subject … Continue reading
The numbers involved are small. Yet, the Troika/Cyprus move to renege on deposit insurance and appropriate private funds is set to reverberate beyond the tiny island. The decision bodes ill for future rescue efforts: 1) it derails popular support for … Continue reading
The reduction of the ECB’s deposit rate to 0% led to an immediate Eur500 mn drop in deposit holdings but prompted a simultaneous increase in current account holdings, leaving overall bank reserves unchanged. Yet, focus on these figures is misplaced: … Continue reading
A fiscal union in the Eurozone (EZ) – whether in the form of additional financing or debt mutualization – is not only politically unrealistic but also counter-productive in dealing with the issues at hand. Transfers or grants would work, but … Continue reading
The changes to the modus operandi of the ESM agreed at the latest summit appear significant at first (sovereign bond purchase, non-preferred creditor status, direct lending to banks plus the quid pro quo of ECB-led banking supervision) and can help … Continue reading