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ECB Trapped: Steinhoff Liquidity Collapses As Lenders Pull Credit Lines

When yesterday we discussed the latest troubles facing embattled retailer Steinhoff, whose bonds are owned by none other than the ECB, we said that while the company’s bonds mature in 2025, its bankruptcy is at most months away. In retrospect, and in light of the latest news, that may have been optimistic, because it now […]


The View From 2017’s Bridge: What Clive Hale Learned This Year

Authored by Clive Hale via The View From The Bridge blog, As long time readers will know we do not put much credence in end of year forecasts; nor in fact forecasts in general; the Fed and the Met Office being stand out examples. As an alternative to what is going to happen in 2018 […]


Gundlach Reveals His Favorite Trade For 2018

One day after Stanley Druckenmiller confessional to CNBC that as a result of central planning and markets that make no sense, the legendary hedge fund manager had a “terrible” year, and his “first down year in currencies ever” (he also said many not very nice things about bitcoin), it was Jeffrey Gundlach’s turn to confess […]


Jim Grant: “Markets Trust Too Much In The Presence Of Central Banks”

Authored by Christoph Gisiger via Finanz und Wirtschaft, James Grant, Wall Street expert and editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank. Nearly ten years after the financial crisis, extraordinary monetary policy has […]


Could Italy’s Banking Crisis Drag Down Mario Draghi?

Authored by Don Quijones via WolfStreet.com,  Just don’t mention “Antonveneta.” A blame game has begun in Italy that risks casting a bright light on the leadership of both the Bank of Italy and Italy’s financial markets regulator Consob. The controversial decision to award the central bank’s current Chairman Ignazio Visco a fresh six-year mandate despite […]


Draghi Speech: Everything Is Awesome In Europe, No Signs Of Systemic Risks

Mario Draghi gave the keynote speech at the Frankfurt European Banking Congress this morning in which he focused on the strong outlook for the Eurozone economy and how his monetary policy is playing a vital role. The speech was peppered with upbeat phrases and adjectives like solid, robust, unabated, endogenous propagation, resilient, remarkable and ongoing. […]


How Corporate Zombies Are Threatening The Eurozone Economy

The recovery in Eurozone growth has become part of the synchronised global growth narrative that most investors are relying on to deliver further gains in equities as we head into 2018. However, the “Zombification” of a chunk of the Eurozone’s corporate sector is not only a major unaddressed structural problem, but it’s getting worse, especially […]


Is There Any Way Out Of The ECB’s Trap?

Authored by Daniel Lacalle via The Mises Institute, The ECB faces the Devil’s Alternative that Frederick Forsyth mentioned in one of his books. All options are potentially risky. Mario Draghi knows that maintaining the so-called stimuli involves more risks than benefits, but also knows that eliminating them could make the eurozone deck of cards collapse. Despite the […]


Bill Blain: “The UK Vs Europe, The Best Comedy Show Ever!”

Blain’s Morning Porridge, Nov 9th 2017, By Bill Blain of Mint Partners The UK vs Europe, the best comedy show ever! “Hold tight, wait till the party’s over, hold tight, we’re in for nasty weather…” You really can’t make this stuff up. Get out the blunted spoons as the EU demands UK pays to play […]


Uh-Oh…Draghi’s Ammunition To Buy Italian Bonds Before The Election Is Less Than We Thought

Having successfully pulled off the announcement of the ECB’s “dovish taper” – where monthly bond purchases will be halved to Euro 30 billion from January 2018 – last month, a challenge for Mario Draghi in Q1 2018 has appeared on his radar. The ECB’s bond buying ammunition is slightly less than analysts thought and there […]


Global Stock Meltup Sends Nikkei To 25 Year High

The global risk levitation continues, sending Asian stocks just shy of records, to the highest since November 2007 and Japan’s Nikkei topped 22,750 – a level last seen in 1992 – while European shares and US equity futures were mixed, and the dollar rose across the board, gains accelerating through the European session with EURUSD […]


Eurozone Inflation Unexpectedly Cools

In the latest headache for Mario Draghi, the Eurozone's closely watched CPI weakened to 1.40% year-on-year in October 2017 versus expectations of 1.50% and a reading of 1.50% the previous month. As a reminder, according to the ECB's September forecast, HICP inflation is expected to rise to 1.5%, leaving little margin for deflation in the […]


The $2 Trillion Hole: “In 2019, Central Bank Liquidity Finally Turns Negative”

In all the euphoria over yesterday’s “dovish taper” by the ECB, markets appear to have forgotten one thing: the great Central Bank liquidity tide, which generated over $2 trillion in central bank purchasing power in 2017 alone – and which as Bank of America said last month is the only reason why stocks are at […]


The Bond Market Calls Draghi’s Bluff. What’s Next?

ECB President Mario Draghi is now walking back QE. This is not a surprise to our readers. I’ve been forecasting this exact development, (as well as the Euro's spike to 120) since August 2016 (by the way, the Euro was at 109 back then everyone thought it would soon reach parity with the $USD as […]


ECB Will Avoid A Taper Tantrum Today, But It’s Running Low On Ammunition

Following up to our earlier preview of today’s critical ECB announcement, here is Bloomberg macro commentator Tanvir Sundhu, who says not to sweat what Draghi says today as the ECB will be able to avoid a “taper tantrum” (for now) and as a result the risk isn’t that the ECB is going to set off […]