Banks prepare plans for Greek eurozone exit

A new Greek currency? Plausible. Grexit? As oft here discussed, Greece is too important for that.

 

Banks and other financial institutions in Europe are stress-testing their internal systems and dusting off two-year-old contingency plans for the possibility Greece could leave the region’s monetary union after a key election later this month.

Among the firms running through drills are Citigroup Inc., Goldman Sachs Group Inc.,  and brokerage ICAP PLC, according to people familiar with the matter. Continue reading

“The ECB Has Lost Control” – Spiegel Asks If “Helicopter Money” Comes Next?

Just 2 short months ago we warned of the rising voice among the cognoscenti tilting their windmills towards the concept of “helicopter money,” as Deutsche bank noted, “perhaps there’s an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock.” Committing what Commerzbank calls “the ultimate sin” is now reaching the mainstream as Germany’s Der Spiegel notes it is becoming increasingly clear that Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation; and many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy.

It seems perhaps tomorrow is… today… As Der Spiegel explains…

Fears that the euro zone is heading for deflation refuse to abate. Now, many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy. But would it work?

It sounds at first like a crazy thought experiment: One morning, every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt. Continue reading

World on brink of oil price war as Opec set to keep pumping

Saudi oil minister suggests Opec oil cartel would keep its production ceiling at 30m barrels per day

Oil slumped on Wednesday as expectations that Opec will cut production faded following dovish remarks by cartel kingpin Saudi Arabia, which could signal the beginning of a price war.

Speaking on the sidelines ahead of Thursday’s critical meeting of the Organisation of Petroleum Exporting Countries (Opec) in Vienna, Saudi oil minister Ali Al-Naimi said: “The market will stabilise itself eventually”.

 

Brent crude – a global benchmark comprised of a blend of high-quality oil from 15 North Sea fields – fell 1.3pc to $77.30 per barrel after Mr Naimi’s comments, before recovering to trade flat at $78.29 by late afternoon. Brent crude has fallen 30pc since June. Continue reading

Gold prices rise amid China’s missing bullion mystery

Commerzbank forecast higher bullion prices even after 500-tonnes of gold ‘vanishes’ in China

Gold hit a three-month high on Tuesday morning, defying most expert views that 2014 would see further falls in the precious metal a day after a report revealed 500-tonnes of bullion is missing somewhere in China.
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IMF crosses swords with Germany over crisis handling

The International Monetary Fund has exhorted Germany to stop dragging its feet on eurozone crisis measures, refuting claims that austerity is working and that Europe is on the road to recovery.

 The IMF said Germany’s vast trade surplus must be slashed in half to rectify the eurozone’s North-South imbalances, and warned that fiscal overkill could abort recovery and set off an EMU-wide chain reaction.

“Fiscal over-performance should be firmly avoided,” said the Fund in its annual health check on the country. Continue reading

Germany Strengthens African Military Presence

One of the main points of discussion at last week’s high-level forum on defense and security in Berlin centered on raising the military protection of Germany’s raw materials sources.

Broadcast live via the government-financed media outlet Deutsche Welle, the forum—hosted by Berlin’s Federal College for Security Studies (baks)—had, as a top item on its agenda, ways and means of adding to the Bundeswehr’s existing presence in Africa within countries that are vital to the continuing supply of raw materials for Germany’s export-led economy. Continue reading

Risk of Bank Failures Is Rising in Europe, E.C.B. Warns

The European Central Bank warned on Wednesday that the euro zone’s slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis, even as overall stress in the region’s financial markets had receded. Continue reading