The ‘epic crisis’ scenario which we outlined in a recent podcast appears to be in full swing. With much riding on the decisions policymakers make in the very near term, Business Monitor’s Chief Economic Strategist Tim Cooper and Head of Europe Country Risk & Financial Markets Mark Schaltuper believe that the probability of a Greek… [Read more]
Time is fast running out for German Chancellor Angela Merkel to display a greater sense of leadership in the ongoing eurozone debt crisis. My colleagues and I believe that market reactions will grow increasingly violent unless decisive steps are taken to fast-track fiscal integration and strengthen existing bailout facilities. But we also note the growing… [Read more]
The EU-wide bank stress test results released on July 15 offered little reprieve for financial markets as concerns over the eurozone sovereign debt crisis continue to dominate. At the heart of the stress test scenario is the ‘adverse scenario’, in which the euro-area economy contracts 0.5% in 2011 and equity markets fall 15%, while banks… [Read more]
The Portuguese government finally caved in on April 6 and requested a European Union (EU) bailout. This was effectively a non-event, however. My colleagues and I had long expected the Portuguese to seek external assistance in Q2 2011, and judging by the muted reaction in the euro and bond spreads, the market had already priced… [Read more]
Irish Prime Minister Brian Cowen last Friday finally unveiled the date on which the country will hold elections: March 11. BMI expects Cowen’s Fianna Fáil party to suffer a heavy defeat on account of widespread disenchantment over its handling of the Irish economy in the run up to and following the global financial crisis. The… [Read more]
Three days ago I stressed that the dissolution of Latvia’s four-party coalition government was looking more and more likely. Today, President Valdis Zatlers announced that he has accepted the resignation of the prime minister and his administration. With the economy in turmoil and now lacking a government, Latvia’s ailments are only surpassed by defunct state… [Read more]
The US government’s ability to shock has apparently gone out the window. Yesterday, Hammerin’ Hank Paulson recanted on the central purpose of the Troubled Asset Recovery Plan (TARP): using $700bn (actually, up to an unlimited amount of money in theory, since the plan calls for $700bn to be held at any one time) to buy,… [Read more]
