First, Bloomberg News [BN] ran a story yesterday, “Spain Lenders’ Bad Loan Ratio Reached Record 11.61%.” This is up from 9.65% a year earlier. All we continue to read and hear from the press and financial pundits is how the Spanish economy has turned the corner and it is time to buy the Spanish banks and Spanish sovereign debt. The non-performing loans are a problem in any economy, but the 25%-plus unemployment rate makes the NPL data a much greater problem. Again, I’d rather miss the first part of a European rally than get caught when the perceptions fail to become reality.
Posts Tagged ‘Graeme Wheeler’
Notes From Underground: Let’s Give Them Something To Talk About … Driving Over The Cliff
December 5, 2012The world awaits a resolution from the fog of U.S. budget battles. The negotiating table was left in a further haze by Secretary Geithner’s comments. In no uncertain terms, the point man for the Obama administration made it “clear” that the White House will let the economy go over the proverbial cliff if tax rates are not increased on the nation’s wealthiest two percent. It is not a good negotiating tactic to back your opponent into a corner from which there is no escape. Immediately after the Geithner comments to CNBC’S Steve Liesman, legislative Republicans responded in a very negative fashion. If the negotiations are mere theater then let the economy feel the brunt of mandated austerity and the STOCK MARKET BE DAMNED. Best economic and budgetary policy cannot be made solely for the sake of saving the equity markets. Bad fiscal policy destroys wealth and jobs anyway so it may be better to push an economic downturn to finally get everybody focused on a genuine long-term reform.
Notes From Underground: Central bank Poker–Three Checks and, Of Course, No Raises
October 24, 2012Yesterday, the Bank Of Canada surprised no one as Governor Mark Carney held rates steady at 1%. The BOC statement also maintained last month’s idea that “over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2% inflation target.” The Canadian dollar rallied on the news as it seemed that the market thought the statement would be more dovish following Carney’s comments of October 15, but instead it was steady as it goes. Today, Governor Carney held a news conference and the headline put out by the news services was “Case For Raising Rates ‘Less Imminent,'” which of course led the programmed headline algos to sell the Canadian dollar because of the “dovish headline.” The press conference was so much more than that and really reiterated the BOC statement and reflected the dilemma that the Carney faces in trying to curb private credit growth in a low interest rate world. Nonetheless, the market currency markets kept the pressure on the LOONIE so a risk-off profile was maintained.