German Default Risk Spikes To Highest Since Brexit As Merkel Lead Plunges To Multi-Year Low

Germany’s Social Democrats narrowed the gap with Chancellor Angela Merkel’s bloc to the closest in more than four years, reinforcing a poll bounce after they chose outsider Martin Schulz to challenge Europe’s longest-serving leader. As Bild reports, the 6-point surge in opposition support was the biggest ever recorded for the party… and may explain why German sovereign risk spiked to its highest since Brexit.
As Bloomberg reports, support for the SPD jumped 8 percentage points to 29% from a month earlier, the highest level since the last election in September 2013, according to the Infratest-Dimap for broadcaster ARD. Merkel’s Christian Democratic-led bloc, known informally as the Union, slid 3 points to 33%. Half of those surveyed would support Schulz if the chancellor were elected directly, compared with 34% for Merkel.

This post was published at Zero Hedge on Feb 6, 2017.

Trump devaluation claims raise fears of global currency war

The Trump administration’s willingness to break with tradition and comment about currency valuations has raised fears that the US might lead the world into a new round of currency wars, angering and unnerving allies.
Shinzo Abe, Japan’s prime minister, complained on Wednesday after Mr Trump attacked China and Japan for “play the devaluation market.”
In response, Mr Abe told the Japanese parliament: “The kind of criticism they are making of yen manipulation is incorrect.”
The previous day Angela Merkel, Germany’s chancellor, denied that Berlin was seeking to influence the valuation of the euro — after a top Trump adviser in an interview with the Financial Times accused Berlin of exploiting a grossly undervalued euro.
The administration’s comments were the latest sign of a dramatic departure from past practice that began during last year’s campaign when Mr. Trump complained that a strong dollar was hurting U.S. companies.

This post was published at Financial Times

Japan Denies It Is Devaluing The Yen, Accuses Trump Of Causing “Uncertainty”

In a shot across the trade war bow with both Japan and Germany, on Tuesday Trump and members of his administration took aim at both Japan and Germany, in addition to China, to accuse them of devaluing their respective currencies, an unexpected move which sent the dollar sliding to multi-month lows. Specifically, on Tuesday morning Trump said: “You look at what China’s doing, you look at what Japan has done over the years. They play the money market, they play the devaluation market and we sit there like a bunch of dummies,” according to a transcript in Congressional Quarterly.
Prior to Trump’s statement, Trump’s top trade advisor, Peter Navarro spoke to the FT, taking aim at Germany, saying it was gaming foreign-exchange markets. His comment sent the EUR surging and precipitated a sharp drop in the dollar. Chancellor Angela Merkel rejected the accusation. At the same time, Donald Tusk, the EU’s president, placed the U. S. alongside Russia, China and terrorism as a source of instability. ‘The change in Washington puts the European Union in a difficult situation, with the new administration seeming to put into question the last 70 years of American foreign policy,’ Tusk said in a letter to European leaders on Tuesday ahead of an EU summit on Feb. 3.
Overnight, it was Japan’s turn, after Prime Minister Shinzo Abe, his main cabinet advisor, Suga, and Japan’s top foreign exchange official on Wednesday all pushed back against Trump’s assertion that Japan is keeping its currency devalued.
“Japan’s monetary policy is for the domestic purpose of beating deflation, and isn’t done with FX in mind, so I think that those remarks are a little bit wide of the mark,’ said Masatsugu Asakawa, the Finance Ministry’s foreign exchange policy chief.

This post was published at Zero Hedge on Feb 1, 2017.

Merkel Responds To Trump Trade War Charge

Following Peter Navarro’s accusations of German manipulation of the euro (and the surge in the EUR relative to the USD), Angela Merkel has responded by explaining implicitly ‘it’s not my fault. Noting that she “can’t change the situation with respect monetary policy” (so blame Draghi), Merkel added she “doesn’t want to influence the euro exchange rate.” EURUSD is dropping a little on her headlines.
Chancellor Angela Merkel, asked about the euro’s exchange rate, says Germany has always supported an independent European Central Bank ‘which is why we won’t seek to exert influence over the ECB.’
‘I neither want to nor can I do something to change the situation.’ The reaction was a modest drop in EURUSD…

This post was published at Zero Hedge on Jan 31, 2017.

Hyundai To Boost Investment In The US To $3.1 Billion Over 5 Years

Having been unleashed with a series of angry Trump tweets, the outpouring of carmarker investments in the US has turned into a veritable torrent, and just hours after GM announced it would invest $1 billion in new US factories, adding 1,000 jobs, Korea’s Hyundai Motor Group said it also plans to lift U. S. investment by 50% to $3.1 billion over five years and may build a new plant there. It has become the latest auto firm to announce fresh spending following Ford, Fiat, Toyota and GM, after President-elect Donald Trump threatened to tax imports.
As a reminder, Trump has repeatedly warned of a 35% tax on vehicles imported from Mexico, where many automakers have taken advantage of the country’s lower labor costs. Toyota Motor, Ford, and Fiat Chrysler have all recently unveiled new U. S. investment plans, while over the weekend German automakers were the latest to come under fire from Trump, provoking a blistering response from Angela Merkel.
According to Reuters, Hyundai Motor and Kia Motors which make up the Hyundai Motor Group have not been directly criticized by Trump but they may have felt vulnerable because among major brands, they have one of the lowest ratios of cars built in the United States to cars sold. To be sure, just like all other carmakers who reacted to pressure by Trump, only to deny they did so, Chung Jin-haeng, president of the group, denied the plan was due to, drumroll, pressure from Trump, adding that a new U. S. factory would depend on whether demand improved under the next U. S. administration.
“We have to be committed to the U. S. market – a strategically important market which can make or break our global success,” he told reporters in Seoul on Tuesday.

This post was published at Zero Hedge on Jan 17, 2017.

Germany’s Misreading of Economic History is the Doom of the EU

Angela Merkel and her party remain clueless about the economic history of Germany which has been made apparent through her insistence upon austerity that tearing the EU apart at the seams. This is like blaming Trump for Hillary’s loss. Merkel’s belief that the quantity of money is the cause of inflation has been proven dead wrong after the central bank’s quantitative easing since 2008 has had no impact on inflation for the past 8 years. At what point does one admit error? Never?

This post was published at Armstrong Economics on Jan 10, 2017.

Watch The EU Banks After US Election Gyrations Are Over

We may not know for a fact who will win the US election, but what we do know is that the Credit Cycle has turned. This will turn out to be more important in the near term, once the expected US Election market gyrations have subsided!
CREDIT CYCLE HAS TURNED
It’s time for investors to refocus on the banks who live via the credit cycle, and specifically the troubled EU Banking sector.
When the Credit Cycle turns, those banks most over-extended always “pay the piper”!
Problem banks are spread right across the Eurozone. Most in the financial media are presently focused on Deutsche Bank, as Angela Merkel currently claims they won’t get “bailed out”. No doubt the markets will force her to change her mind even if she was to stay in power in 2017. You can be assured that DB will get “bailed out”.
It’s some of the lesser well known banks which are now the scariest.

This post was published at GoldSeek on Tuesday, 8 November 2016.

Sterling Stumbles On Report Merkel Said To Shut Brexit “Back Door” Channels

Moments ago, sterling reverted to its familiar downward sliding trajectory and took a steep move lower following a Bloomberg report that German Chancellor Angela Merkel’s government is “battening down the hatches for coming Brexit talks, instructing officials to avoid any back-door contacts that could hand the U. K. an advantage”, citing people familiar with the discussions.
According to the report, Merkel’s chancellery is receiving U. K. diplomats but refusing to grant U. K. any favors in advance of the official negotiations. It adds that some government ministries are instructed to shun official contacts with U. K. counterparts that could reveal negotiating positions.
German message in private is same as in public: can’t start discussions before U. K. triggers Article 50 exit clause.
Bloomberg adds that Merkel’s core message to U. K. ‘has been consistent’ – full participation in EU single market means accepting EU’s four freedoms: German govt spokesman Steffen Seibert last week.
GBPUSD slumped as much as 1.227 after trading above 1.23 on ongoing speculation about UK negotiations involving “hard brexit.”

This post was published at Zero Hedge on Oct 19, 2016.

Protectionism Returns: Germany Seeks To End “Unwanted Foreign Takeovers” Of Local Companies

Many have said that if Trump wins the presidency, a new ice age of global trade protectionism may be upon us. Well, some may be taking steps to preempt that and are already launching various protectionist measures in response to rising populist anger.
Just a few months after the US Treasury unveiled new anti-tax inversion rules, which were meant to kill the Pfizer-Allergan deal, but according to many may have launched a new wave of global deal protectionism, overnight Germany appears to have retaliated in kind when according to Welt am Sonntag, Angela Merkel’s government was exploring options to limit any purchase of more than a 25% stake in German companies.
As Reuters adds, the German Economy Ministry wants to protect high tech companies in Germany fromunwanted takeovers, especially from state-owned and partly state-owned companies in non-European countries. Welt am Sonntag (WamS) said Deputy Economy Minister Matthias Machnig had in the past week sent to members of the German government a paper containing six key points for reviewing investment at the European Union level. The paper foresees wide-reaching rights for the EU and national governments to prohibit company acquisitions by investors in non-EU countries, the newspaper said.

This post was published at Zero Hedge on Oct 16, 2016.

Deutsche Bank Chief Economist: DB Collapse Could Lead to the Next Great Depression

Despite being the fourth-largest bank in Europe with over $2 trillion in assets, Deutsche Bank’s (NYSE: DB) collapse is a huge possibility.
It simply doesn’t have the free cash flow necessary to pay the $5.4 billion Department of Justice settlement issued on Sept. 30. Currently, Deutsche Bank reports its free cash flow as $2.4 billion as of June.
What’s more, the German government doesn’t want to bail out the bank. German Chancellor Angela Merkel has repeatedly refused to say whether the government will have the funds necessary to do so.
‘We naturally hope,’ she said to reporters on Sept. 27, ‘even if there are temporary difficulties that things will develop positively.’
Without a bailout, Deutsche Bank’s fate seems sealed…
You see, earlier in September, analysts at JPMorgan Chase & Co. said a U. S. settlement of $3 billion would render Deutsche Bank unable to settle other legal issues, according to Bloomberg. Any additional $1 billion in settlement charges would erode the bank’s capital by a staggering 24 basis points, the analysts said.
That would be a huge blow to pensioners, savers, and other Deutsche Bank customers.
‘Central banks around the world are continuing to promote excessive stimulus – just like they did before the Great Depression.’
But it gets even worse.

This post was published at Wall Street Examiner on October 5, 2016.

German Media Says Merkel Can Not Afford To Bail Out Deutsche Bank

Having kept mostly silent during the past week when Deutsche Bank stock was crashing, its default risk soaring, and only a spurious rumor by French AFP, based on a Twitter report, prevented the bank’s stock from going into a three day weekend at all time lows , on Saturday the German press woke up to the ongoing local banking crisis, reiterating what stoked the crisis in the first place, namely Angela Merkel’s statement last weekend that it won’t bail out Deutsche Bank.
Repeating not only what Merkel herself said last week – a statement which first prompted this week’s plunge in DB stock – but what we have said all along, namely that a bailout of Deutsche Bank would be political suicide for the Chancellor due to pressure from AfD, and may lead to the collapse of Europe, where other nations, namely Italy, have been pushing for a similar bailout of their own banking systems only to be met with stern denials by German, Reuters reports that according to much of the German media, Angela Merkel cannot afford to bail out Deutsche Bank given the hard line Berlin has taken against state aid in other European nations and the risk of a political backlash at home.

This post was published at Zero Hedge on Oct 1, 2016.

Germany Will Rescue Deutsche Bank If Necessary, Allianz Says

The German government will have to bail out Deutsche Bank AG if its financial situation gets bad enough, Allianz Global Investors AG Chief Investment Officer Andreas Utermann said.
‘I don’t buy at all what’s coming out of Germany in terms of Germany not wanting to step in ultimately if Deutsche Bank was really in trouble,’ Utermann said Monday in a Bloomberg Television interview with Francine Lacqua and Tom Keene. ‘It’s too important for the German economy.’
German officials have tried to shut down talk of a potential rescue for the country’s biggest bank, with Chancellor Angela Merkel’s spokesman Steffen Seibert saying Monday there are ‘no grounds’ for speculation over state funding for the $2 trillion-asset lender. Focus magazine reported Sunday that Merkel has ruled out any state assistance for Deutsche Bank AG as she considers whether to run for a fourth term next year.

This post was published at bloomberg

DB Stock Hits a Record Low (and Our Puts Are Up 166%)

Monday morning, Deutsche Bank AG (NYSE: DB) stock hit a record low, dropping 6.5% to below $12. So far this year, the embattled bank has lost more than 50%.
As I warned you in February, Deutsche Bank is the proverbial canary in the coal mine of the global financial system. It poses systemic risk because it is poorly managed, even more poorly capitalized, and party to $60 trillion of derivatives contracts.
Now the U. S. government is chasing it down for billions of dollars of penalties on fraudulent mortgages it sold before the financial crisis, but German Chancellor Angela Merkel has said that the German government will not bail out the bank if it runs out of money. This is a recipe not only for DB stock to drop to where global interest rates are – zero – but to damage the rest of the financial system on the way.

This post was published at Wall Street Examiner by Michael E. Lewitt ‘ September 27, 2016.

Deutsche Bank Is Going Under: The Real Reason Germans Were Told To Prepare For…

This article was written by Daisy Luther and originally published at DaisyLuther.com
There is a very real possibility that Deutsche Bank is going down.
If the most prominent bank in Germany fails, the effect on Europe will be profound, and I don’t think the United States will escape the effects. The ripples will turn into a tsunami as they travel across the Atlantic. Already, the bank’s troubles have stressed the American stock market.
Angela Merkel has stated that Deutsche Bank will not be getting a bailout from the European Central Bank – the lender of last resort for European banks.
The Department of Justice recently issued a $14 billion fine to the bank to settle a mortgage-backed securities probe…and the bank has no intention of paying.
‘Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited,’ the company said in a statement early Friday in Frankfurt. ‘The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts.'(source)
Deutsche Bank shares fell alarmingly this morning on the news that Merkel won’t support the bank.

This post was published at Alt-Market on 27 September 2016.

Merkel May Be the Worse Politician in all of History

Germany’s Chancellor Angela Merkel has got to be the worse politician in history when it comes to understanding the economy. Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017 according to Focus magazine citing unidentified government officials. Merkel is just incapable of making any rational decisions whatsoever. This policy means any German who has money in Deutsche Bank is at risk and she may set off a major banking crisis if there is a run on the bank in mass.
This is the very same policy Merkel applied to Greece that resulted in her image collapsing in July 2015 so she then opened the gates to the refugees. Merkel’s economic idea are so devastating it is a complete joke. She will destroy the Germany economy for a bail-in with Deutsche Bank will shatter the German economy and most likely result in the final destruction of the euro.

This post was published at Armstrong Economics on Sep 26, 2016.

E.U.’s TTIP trade deal with the U.S. has collapsed, says Germany

The European Union’s long-planned trade deal with the U.S. has collapsed with negotiations showing no sign of progress despite three years’ of talks, according to Germany’s economy minister.
Sigmar Gabriel, also Germany’s vice-chancellor, claimed this weekend that disagreements between the E.U. and the U.S., and between countries within the E.U., appear to have ‘de facto’ killed off any prospect of a deal to create the Transatlantic Trade and Investment Partnership (TTIP), which would be the largest bi-lateral free trade agreement ever.
‘The talks with the U.S. have de facto failed because we Europeans of course must not succumb to American demands. Nothing is moving forward,” Mr. Gabriel said. ‘In my opinion, the negotiations with the United States have de facto failed, even though nobody is really admitting it,’ Mr Gabriel said.
His words clash with those of Chancellor Angela Merkel who has described the deal as ‘absolutely in the EU’s interests.’ The head of the centre-Left Social Democratic Party told public broadcaster ZDF that negotiators had failed to agree on a single item out of the 27 chapters of the treaty.

This post was published at The Telegraph

Did Germany Just Blink?

So who’s going to bail out the banks?
A most unusual thing happened in Europe this week. In a rare climb down, Angela Merkel’s government decided not to push the European Commission to impose a punitive fine on Portugal and Spain for their persistent failure to comply with their budget deficit targets, leading one Eurogroup minister to declare that the euro zone’s Stability Pact is ‘dead.’
Of Europe’s 27 commissioners, only four voted in favor of applying the fines; the other 23 voted against. According to El Pas, the deciding factor in the decision was an impromptu phone call from German finance minister Wolfgang Schuble to some of the more conservative commissioners, giving them the green light to forego the fine.

This post was published at Wolf Street by Don Quijones ‘ July 30, 2016.

Gold And Silver – Merkel: Example Of How Clinton Is A Globalist Puppet

Americans have faced mass murder tragedies over the last few decades, all home- grown killers: Columbine high school shootings, the Sandy Hook elementary school shooting, [a false flag?], the recent Orlando shooting, to name a few amongst so many others. The taking of innocent lives in such a senseless manner is a heartfelt reaction experienced by the entire nation.
It is with empathy that we identify with the terrorist events that occurred in Germany, equally senseless but attributable to a common external trigger: Islamic terrorists. We use the term Islamic to describe the terrorists with no concern to be ‘politically correct.’ The source of the murderers is beyond question. We also feel for the French and what that nation has been suffering as a consequence of allowing foreign Middle East immigrants to freely enter the country.
German Chancellor Merkel has been very vocal in support of ‘welcoming’ the growing tsunami of immigrants from war-torn Middle Eastern countries. The United States globalist leaders are directly responsible for unleashing the onslaught of immigrants and inevitable terrorists upon Europe. It has been a purposeful effort to destabilize and weaken Europe, and tyrant George Soros has been the leading champion behind the elite’s Problem-Reaction-Solution effort to rid Europe of its individual sovereign nations and national identities.
Angela Merkel could care less about the citizens of Germany. From the economic weakening of the German economy due to the US-induced European sanctions against Russia to the obvious weakening of German nationality, favoring the protection of unwanted Middle East immigrants against the interests and safety of German citizens,
Merkel exhibits no legitimate concern for stemming the immigration problems.
Here is a political quote from the ‘deeply concerned’ [cough, cough] Merkel:

This post was published at Edge Trader Plus on July 30, 2016.

European Economic & Refugee Crisis

Angela Merkel has finally admitted that she essentially invited terrorists into Germany, and thus to Europe, in the obvious wake of the Nice attack. Besides security, this will have a major impact upon the economy of Europe as tourists are frightened away. Even prior to the Nice attack, the US State Department put out a travel alert for Americans traveling to Europe this summer. An attack similar to that of Nice directed at tourists will be the final straw in breaking the back of the tourist trade for Europe. If we look at Italy, its economy has a large portion dependent upon tourism. Italy is famous for its archaeological and artistic heritage and it ranks number one in the world with 51 sites inscribed on the UNESCO list of World Heritage Sites. The historic, artistic heritage of Italy is comprised of literally hundreds of archaeological sites and over 3000 museums. In all, tourism is extremely important in the Italian economy with tourists spending almost 36 billion euros in 2015, which amounts to 7.2% of the total value of exports. Tourism in Italy accounts for 11.8% of the total national GDP and 12.8% of all jobs are directly tied to tourism. That accounts for 171 billion euros and 3.1 million jobs. Extremist attacks on the tourist trade will devastate the European economy.

This post was published at Armstrong Economics on Jul 19, 2016.

Italy Just Bailed Out Another Failed Bank, May Use Pension Funds For Future Bank Rescues

Despite – or perhaps due to – Italy’s failed attempt to slide a state-funded 40 billion recapitalization attempt past Angela Merkel while blaming it on Brexit, and coupled with a bailout proposal to provide 150 billion in liquidity to insolvent banks, overnight we got yet another confirmation that the biggest risk factor for Europe is not Brexit but Italy, where yet another failed bank was bailed out. As the FT reports overnight, Atlante, Italy’s privately backed 5bn bank bailout fund which was created in April to stem the threat of contagion from struggling lenders and whose assets turned out to be woefully inadequate, took control of Veneto Banca after a 1bn capital increase demanded by EU bank regulators attracted zero interest.
This is good news for Veneto Banco and bad news for all other insolvent banks, because the fund, known as Atlas in English, was intended to hold up the sky for Italian banks. Instead it is now practically out of funds, having depleted more than half of its war chest after taking control of Popolare di Vicenza, another regional bank, last month.
That has left little in reserve to tackle about 200bn in non-performing loans run up during Italy’s three-year recession, of which 85bn have not yet been written down. Bad loans are weighing on bank lending and crimping an already weak recovery.

This post was published at Zero Hedge on Jul 1, 2016.