• Tag Archives EU
  • UKIP Wants Nigel Farage Back Claiming May Has Betrayed BREXIT

    Theresa May’ Florence speech is being seen by many as a betrayal of BREXIT. Instead of getting on with it, she has said that there will be a longer transition period even two years beyond 2019 into 2021. She said that Europeans will still be able to come and work in Britain into 2021 but under a ‘registration system’ that many fear will still allow terrorists to enter from Europe.
    Prime Minister May said that the temporary transitional arrangements ‘will not go on for ever’and will end around two years after Britain leaves the European Union (EU) in 2019. She made it clear that ‘[d]uring the implementation period, people will continue to be able to come and live and work in the UK.’ She did also say that ‘[t]here will be a registration system, an essential preparation for the new regime.’

    This post was published at Armstrong Economics on Sep 24, 2017.


  • Pound Flash Crashes After Moody’s Downgrades UK To Aa2

    In an otherwise boring day, when Theresa May failed to cause any major ripples with her much anticipated Brexit speech, moments ago it was Moody’s turn to stop out countless cable longs, when shortly after the US close, it downgraded the UK from Aa1 to Aa2, outlook stable, causing yet another flash crash in the pound.
    As reason for the unexpected downgrade, Moodys cited “the outlook for the UK’s public finances has weakened significantly since the negative outlook on the Aa1 rating was assigned, with the government’s fiscal consolidation plans increasingly in question and the debt burden expected to continue to rise.”
    It also said that fiscal pressures will be exacerbated by the erosion of the UK’s medium-term economic strength that is likely to result from the manner of its departure from the European Union (EU), and by the increasingly apparent challenges to policy-making given the complexity of Brexit negotiations and associated domestic political dynamics.
    Moody’s now expects growth of just 1% in 2018 following 1.5% this year; doesn’t expect growth to recover to its historic trend rate over coming years. Expects public debt ratio to increase to close to 90% of GDP this year and to reach its peak at close to 93% of GDP only in 2019.
    And so, once again, it was poor sterling longs who having gotten through today largely unscathed, were unceremoniously stopped out following yet another flash crash in all GBP pairs.
    Full release below:

    This post was published at Zero Hedge on Sep 22, 2017.


  • German Elections Void of Any Critical Discussion

    The German Bundestag election campaign has seen a total black-out of any discussion of the major crisis that is building in Europe. Nobody is mentioning that Euro crisis, ECB monetary policy, disintegration of the EU, refugee crisis, pension crisis, the municipalities on the brink of insolvency, or the drastic increases in taxation coming AFTER the election that will only lower disposable incomes and extend deflation.
    The politicians, and the press, are in full swing to hide the real trend at foot. The press is running stories why the Germans Love Merkel, yet she has never won even 40% of the popular vote. Even the press outside of Germany is in on the ‘selling’ of Merkel because she is the leader of Europe – good – bad – indifferent.
    Perhaps the monetary policy of the ECB has set the stage for a serious monetary crisis over the coming years that will seriously disrupt the German economy, in one way or another, depending upon the industry. Mario Draghi has experimented with negative rates which has kept the Eurozone governments on life-support – but they have not used the time to reform anything.

    This post was published at Armstrong Economics on Sep 23, 2017.


  • Trying to Save the Euro from Total Disaster

    European Commission President Jean-Claude Juncker has now come out in a very desperate move telling that those members of the EU who are non-euro countries should introduce the euro ASAP. ‘The euro is destined to be the single currency of the EU as a whole,’ Juncker declared. Juncker then proposed a ‘euro preparation instrument’ to provide technical and financial assistance to make this transition.
    The Euro is in serious trouble because of the total mismanagement of the ECB. Low to negative interest rates have totally failed to stimulate the economy after almost 10 years. Now that rates must rise to try to avoid a massive pension collapse in Europe, the ECB could suffer a major default and will need to be bailed-out itself by the government since it owns 40% of euro-zone debt.

    This post was published at Armstrong Economics on Sep 15, 2017.


  • Global Stock Prices Fueled by Ugly Earnings

    Hype works, until it doesn’t.
    In theory, stock markets surge because earnings are rising or are expected to rise. But the astounding thing in this eight-year bull market is the combination of how far stocks have surged since 2011 and how lousy earnings have been – globally!
    I’ve been pointing this out for US equities, but this is a global thing, with global implications, and of global magnitude, and on that level, it’s even grander and more astounding.
    Global stocks, as measured by the MSCI AC, which tracks equity returns in 23 developed and 24 emerging markets, has soared over 11% year-to-date and is up 32% since pre-Financial-Crisis peak-year 2007. Some components within it:
    The MSCI US, reflecting US equities, is up 11.5% year-to-date and 75% since 2007. The MSCI EM for Emerging Markets surged 23% this year and is up 45% since 2007. Even the MSCI EU for European equities is above its level in 2007.

    This post was published at Wolf Street on Sep 7, 2017.


  • Bill Blain: “North Korea Is Waving A Red Flag In The Bull’s Face. What Will Donald Do?”

    Mint – Blain’s Morning Porridge – August 23rd 2017
    ‘Out on the road today, I saw a deadhead stick on a Cadillac.. A little voice inside my head said, ‘Don’t look back. You can never look back.”
    Interesting start to the last week of summer: a nasty dose of considered North Korean provocation, disbelief at what Hurricane Harvey is doing to Texas, handbags betwixt UK and EU on ‘negotiating seriously’ over Brexit, and all these before we even get a whiff of this week’s EU data and US payrolls on Friday. I won’t even bother about Jackson Hole last week – yawn – we’ll talk about Central banks come September.
    The market reaction to the latest North Korean missile flight tells us everything we need to know: Risk Off. Equities wobble, gold up, bond yields down and gold higher. Markets understand the reality: the Trump Jump is now well and truly over – Treasury yields are right back down there, the dollar is down 10%, stock markets have gone short, yet the US populace. But if there was a snap election tomorrow….. Don’t even think about it..

    This post was published at Zero Hedge on Aug 29, 2017.


  • The Overlooked Cost of Electric Cars by EU Gov’t

    Government first imposed taxes on alcohol and cigarettes under the claim that they were trying to make people stop for their own good. But as always, as the governments became addicted themselves to the tax revenue, then they looked to tax soft drinks in Philadelphia to prevent people from drink too much sugar, and New York tried to them impose a tax on electronic cigarettes. In New York, the Democratic Governor Andrew Cuomo lived up to the Democratic motto – tax everything. Only the fact that the GOP-controlled Senate in New York, the Republicans rejected Cuomo’s plan to tax the liquid used in electronic cigarettes. Government always pretends to be raising taxes to help people, but it is always a huge lie.

    This post was published at Armstrong Economics on Aug 25, 2017.


  • 23/8/17: Ireland: A Haven for SPVs?

    Ireland scored another ‘first’ in the league tables relating to tax optimisation and avoidance, staying at the top of the Euro area rankings as a Special Purpose Vehicles (SPVs) destination: my comment, amongst others).
    As my comment in the article linked above alludes, there is a combination of factors that is driving Ireland’s ‘competitiveness’ in this area. Some are positive for the economy and non-zero-game in relation to our trading partners, e.g.- Ireland providing a functional access to the European markets via regulatory and markets infrastructure arrangements that facilitate trading from Dublin into the rest of the EEC;
    – Ireland offering a strong platform for on-shoring human capital, a much more functional platform than any other EU nation, due to greater openness to skills-based migration, English language, common law and open culture;
    – Ireland serves as a clustering centre for a range of financial services functions, making it more attractive than traditional tax havens for conducting real business.

    This post was published at True Economics on August 23, 2017.


  • “The Perfect Storm Is Brewing”: Goldman Warns Italy Has The Lowest Capacity To Absorb Migrants

    While Europe’s economy and capital markets have been spared any major shocks in the past year, and in fact European GDP has been on a surprisingly resilient uptrend in recent quarters led higher by the relentless German export-growth dynamo (courtesy of the very, very low Deutsche Mark and a lot of broke Greeks), an old and recurring problem has re-emerged, one which threatens the stability and cohesion of the European Union itself: the latest surge of refugees which, arriving mostly from North Africa in recent months, has made Italy its primary landfall target resulting in a surge in migrant arrivals on Italian shores. However, with the rest of Europe largely shutting its borders to this refugee influx forcing Rome to deal with what many in Italy see as an unwelcome presence, a distinct sense of bad-will has been floating around Europe in recent months as Rome’s pleas for more solidarity from its European peers have been stubbornly ignored. Meanwhile, Italy has accepted nearly 100,000 refugees in the first six months of the year and the number is rapidly rising.
    Now, a new report issued by Goldman Sachs will likely pour even more gasoline on the fire, as it finds that just as Rome alleges, “Italy has the lowest capacity to absorb migrants among the major EU economies. This is measured using three indicators of integration: (1) economic integration; (2) social integration; and (3) policy effectiveness.”
    While hardly new for regular readers, this is how Goldman lays out the problem:

    This post was published at Zero Hedge on Aug 22, 2017.


  • Support for Hard Brexit in the UK Hardens

    ‘Significant economic damage’ is a ‘price worth paying.’ But businesses are not so sure.
    Europhiles hoping that time might heal or at least narrow the rift separating the UK and the EU after last year’s Brexit vote are likely to be sorely disappointed by the findings of a new poll jointly conducted by Oxford University and London School of Economics.
    The survey reveals that there is more support for harder Brexit options because Leavers and a substantial number of Remainers back them. The survey’s findings bolster the case for the hard-Brexit-or-nothing position favored (at least publicly) by British Prime Minister Theresa May. The alternative – a so-called ‘soft’ Brexit – would imply having to accept full freedom of movement for all EU citizens in return for some form of privileged access to the single market. Given that regaining control of UK borders was one of the key issues that swung the referendum in Brexit’s favor, such a proposition was always unlikely to sway a majority of British voters.
    This new poll, for which 3,293 people were consulted, appears to be confirmation of that. A majority of Brits, including many Remainers, largely concur that Brexit should mean the UK taking back control over its borders, leaving the jurisdiction of the European Court of Justice, and paying only a small ‘divorce bill’ to the EU.

    This post was published at Wolf Street on Aug 16, 2017.


  • EU Proposal Would Allow Banks to Suspend Cash Withdraws

    An EU proposal underscores just how much control governments have over your money.
    According to a document reviewed by Reuters, EU member states are considering a proposal that would allow them to temporarily stop people from withdrawing their own money from their accounts. The policy is intended to help prevent bank runs.

    The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble. The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits at Banco Popular contributed to the collapse of the Spanish lender.’
    Under the plan, banks would be able to suspend payouts for five business days. They could extend the suspension up to 20 days ‘in exceptional circumstances.’
    The EU working paper said giving supervisors the power to temporarily block withdraws was ‘a feasible option.’ Some countries in the EU, including Germany, already allow a moratorium on bank payouts. These countries support the move to make it an EU-wide policy.

    This post was published at Schiffgold on AUGUST 9, 2017.


  • The Creepiest EU Initiative Yet: Registering Dissent As “Russian Propaganda” Under Soros’ Direction

    Russia is the favourite scapegoat for the Western establishment when it comes to its own failures. Ever since Brexit and Trump’s victory, the Western elite has regularly tried to link citizen discontent to ‘Russian disinformation’, ‘hackers’ or ‘trolls’, instead of looking at its own policies. While in the US this took the form of a witch hunt against the Trump administration, in the EU it has taken the form of a ‘proscription list’ of the media that are not enthusiastic enough with the idea of a conflict with the Eastern neighbour. Under the official purpose of countering ‘disinformation coming from Russia’, the EU External Action has created a ‘disinformation review’1)with weekly updates on ‘fake news’ and the websites that post them.
    The EUAS officially branded researchers and journalists as fraudulent, unpatriotic and dishonest without any notification. There is a small disclaimer on the list that states that ‘disinformation review cannot be considered an official EU position’. Yet it was created by the European Council, is part of the ‘diplomatic service’ of the EU, hence funded by it, uses its symbols and institutional addresses. So, it is part of the EU and yet does not represent its official position? The statement seems to have been made for the express purpose of dishonestly dismissing concerns raised by citizens.

    This post was published at Zero Hedge on Aug 9, 2017.


  • Europe’s Banking Dysfunction Worsens

    Authored by Chris Whalen via The Institutional Risk Analyst,
    ‘While the US and the UK have been mired in political chaos this year, the EU has enjoyed improved economic conditions and some political windfalls. The question now is whether this good news will inspire long-needed EU and eurozone reforms, or merely fuel complacency – and thus set the stage for another crisis down the road.’ Philippe Legrain, Project Syndicate
    This week The Institutional Risk Analyst takes a look a the recent reports out of the EU regarding a proposal to ‘freeze’ the retail accounts of failing European banks. The original story in Reuters suggests that our friends in Europe actually think that telling the public that they will not have access to their funds, even funds covered by official deposit insurance schemes, is somehow helpful to addressing Europe’s troubled banking system. Investors who think that Europe is close to adopting an effective approach to dealing with failing banks may want to think again.

    This post was published at Zero Hedge on Aug 2, 2017.


  • The Dark Underbelly of Spain’s Jobs Recovery

    Where Did All the Workers Go?
    Two years ago, the total number of unemployed in Spain, officially speaking, was 5.5 million – the equivalent of 23.2% of the country’s active population. It was the second-highest unemployment rate in the EU, far worse than third-place Hungary (18.5%) but not quite as terrible as Greece (26%).
    At that time, Spain was also proud home to the five European regions with the worst levels of unemployment. At the top of the heap was the southern province of Andalusia whose unemployment rate was close to 35%! Even fifth place, Castilla-la Mancha, had an unemployment rate of 29%.
    Now, after two years of consecutive quarters of robust GDP growth and an unprecedented tourist boom, things appear to have changed. At last count, unemployment was down to 17.2% – still depression-level, but no longer apocalyptic! For the first time since 2008 the number of unemployed in Spain is below four million. Even in Andalusia things are apparently improving since the region’s ranks of jobless have shrunk by 160,800 in the last year.
    This is all welcome news in a country with such chronic unemployment problems, but there are two important caveats: first, the active population in Spain continues to shrink, and that has an important hand in the improving figures; second, almost all of the new jobs that are being created are of the poorly paid and highly precarious kind.

    This post was published at Wolf Street on Aug 1, 2017.


  • The Economic Euphoria Has Reached New Heights, When It Crashes… – Episode 1345a

    The following video was published by X22Report on Jul 31, 2017
    Companies are starting to figure out that many of the clicks on social network ads are coming from bots, they are now scaling back on advertising. Pending homes sales popped up but when you look at the overall picture housing has gone nowhere. Dallas Fed soft data improves while the hard data crashes. Majority of the economic data is declining, there has been no improvement and the economy euphoria is coming to and end, when it does it will be a disaster. The EU is in trouble their bank insurance will not be able to cover a major disaster. The amount of tax revenues coming into the government can not keep up with the debt.


  • FX Week Ahead: Can The Swiss National Bank Breathe A Sigh Of Relief?

    Is the SNB at it again? EURO-phoria takes off as longer term investors get the nod.
    Having focused on the USD in recent weeks, and how the market has rounded on the greenback ‘en masse’, we can finally look to some exchange rate moves outside of the major spot rates. Sharp losses in the CHF have shown that the big money is taking note of the recovery in the Euro zone, and that investment prospects look good as the smaller member states are gaining traction alongside the power house that is Germany. Last week, IFO economists said they saw little which could derail the domestic economy, including the strengthening EUR, which has traded to a little shy of 1.1800 in the past week, but more significantly, taking out the 1.1711/12 (long term range highs in the process. This led to the ‘follow through’ which saw EUR/CHF shooting up to levels close to 1.1400, having spent a year long slumber inside a 1.0600-1.1000 range.
    More data out next week is expected to confirm the above, headlined by EU wide Q2 GDP on the Tuesday, with updated manufacturing PMIs due out for all the leading states, as well as unemployment data. Focus on Germany will be shared out a little to Spain and Italy, also seeing marked improvement in economic activity. Spanish jobs have increased significantly, and in Italy, industrial orders have taken off, so no surprise for widespread calls for the ECB to rein in their APP, but once again, market forces are threatening to choke off some of this recovery. As such, there is growing sentiment that once the ECB do signal policy change in Autumn, there will be a sense of disappointment – naturally linked to the rampant gains in the EUR seen already. German 10yr hit levels shy of 0.65% a few weeks back, but the moderation of some 10bps or so looks to have been a short lived affair as Bunds took a sharp hit as the regional inflation data out of Germany saw healthy pick up. On Monday we will see whether CPI is rising across the region as a whole, but consensus is looking for 1.3% in the headline, 1.1% in the core.

    This post was published at Zero Hedge on Jul 30, 2017.


  • Leaked: EU Plans to Freeze Deposits to Prevent Bank Runs

    Desperate Times, Desperate Measures. Following a spate of drastic banking interventions in Spain and Italy earlier this summer, the European Commission is preparing new legislation to prevent bank runs from completely wiping out Europe’s hordes of zombified lenders. According to an Estonian document seen by Reuters, that legislation would include measures allowing EU governments to temporarily stop people withdrawing money from their accounts, including by electronic fund transfers.
    The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits pushed Banco Popular over the brink in Spain. In its final days, Popular was bleeding deposits at a rate of 2 billion a day on average. Much of the money was being withdrawn by institutional clients, including mega-fund BlackRock, Spain’s Social Security fund, Spanish government agencies, and city and regional councils.
    The European Commission, with the support of a number of national governments, is determined that what happened to Popular does not happen to other banks. ‘The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,’ a source close to the German government said.

    This post was published at Wolf Street on Jul 30, 2017.


  • IMF cuts 2017 growth forecasts for U.K. and U.S.

    The International Monetary Fund has cut its growth forecast for the U.K. economy this year after a weak performance in the first three months of 2017.
    In its first downgrade for the UK since the E.U. referendum in June last year, the IMF said it expected the British economy to expand by 1.7% this year, 0.3 points lower than when it last made predictions in April.
    The Fund raised its forecasts for the U.K. after the Brexit vote as a result of the much stronger than envisaged activity in the second half of 2016. In October 2016, it pencilled in growth of 1.1% for 2017, raising this forecast to 1.5% in January this year and to 2% in April.
    Maurice Obstfeld, the IMF’s economic counsellor, pointed to a marked change in early 2017. He said the U.K.’s growth forecast had been lowered based on its ‘tepid performance’ so far this year, adding: ‘The ultimate impact of Brexit on the United Kingdom remains unclear.’
    The IMF left its growth forecast for the U.K. in 2018 unchanged at 1.5% but said one key risk facing the global economy was that the Brexit talks would end in failure.

    This post was published at The Guardian


  • Why Robots Will Win the Coming Trade Wars

    The first step to surviving a war is knowing which side you are on. But in a trade war, that’s not always easy.
    Suppose the US imposed tariffs on steel imported from the European Union. Prices on goods made with that steel would probably rise, but this would affect you only to the extent you rely on those particular goods.
    When the EU responded by slapping tariffs on items ‘Made in USA,’ it would hurt you only if your livelihood depended on those export revenues.
    Of course, we may be headed toward a wider trade war, which could cause more general price inflation, hurting everyone in some way – though I think it will be more targeted at first.
    But one group is sure to win in a trade war because demand for their services will skyrocket.
    Who are these lucky people?
    They aren’t people at all. They’re robots.
    Trade Talks Fizzle
    If you monitor trade and logistics news like I do, the signs are everywhere. Last week, US and Chinese negotiators met in Washington to cap the 100-day dialogue that Presidents Trump and Xi promised at their April summit.
    It didn’t go well, apparently.

    This post was published at Mauldin Economics on JULY 25, 2017.