Here's my summary of the key news over the weekend in 90 seconds at 9 am, including news global stock markets and commodities markets rallied sharply in celebration of a deal reached late on Friday after a European leaders summit that lasted 13 and a half hours.
The S&P 500 rose 2.5%, commodity prices rose 5% and the New Zealand dollar rose over 80 USc after European leaders agreed to use European rescue funds to directly inject capital into European banks, including Spain's banks.
This appears to break the nexus between bank debts and national debts, given struggling nations on the periphery of the Euro zone have often had to issue sovereign debt to bail out their banks. Under this proposal,, European resuce funds guaranteed jointly by Euro zone nations would directly inject capital into these banks, would would avoid nations being dragged ever deeper into sovereign debt by their broken banking systems. See more here on the deal at Bloomberg.
Ireland and Greece have already suggested revisiting their resuce deals which were forced (partly) by just such banking crises.
However, the summit agreed that a European banking union with a common regulator would be needed first and that a proposal would be made before the end of the year. Sceptics worry that may not be soon enough and that the 500 billion euros in the European rescue funds may not be enough to cope with 2.4 trillion euros of debt in Spain and Italy. See more here from the sceptics at FTAlphaville.
Meanwhile, investors are looking ahead to monetary policy decisions later this week from the European Central Bank and the Bank of England.
The ECB is expected to cut its official rate by 25 basis points to 0.75% and may announce some extra form of easing, including a new version of its long term lending programme. It made similar moves last year after assurances of structural reform action from European governments.
The Bank of England is expected to announce a further 50 billion euros of money printing on Thursday night.
Also in London, the Chairman of Barclays, Marcus Agius, is expected to resign this week over the LIBOR scandal that is dominating debate in the The City. See more here at Bloomberg.
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3 Comments
Today is 1st of July benefit day, you can tell, the town is full of people that are just that little bit scary. Dropped into Wal mart to get some stuff for the car, super scary, don’t know where these guys hide out during the week but hope they go back.
So I asked the girl at the counter if every Sunday is the same she said, “every benefit day.” “Its always packed, the lady behind me said , “I’ve got a job but I’m on a benefit too as the jobs not full time “, oh I said where do you work, she said “I’m a care giver.” I said no kidding who do you look after, she said “my boyfriend.” Welcome to the USA 2012. A place where Wal mart gets %40 of its sales to welfare recipients, a place where they advertise food stamps and a telephone number to ring and check if you are eligible.
The Empire is past its peak, just got back from San Fran, where do all those cars come from?
Hypertiger
According to the Bretton Wood rules...The USA must live or the world dies.
Revealed in 1971 when the previous Gold is money rule was annihilated by Truth.
Well the world doesn't but the global banking system does and those dependant upon it to sustain what they believe the world is have an increased chance to be turned into skeletons.
There are more banks in the USA than anywhere on Earth...
The USA goes down...It's over.
Devaluation of the Euro is the reward for going green. A.k.a. Loco
Who controls the oil?
Not Europe.
Most in the EU are running deficits to supply the surplus to Germany to hide their complete and utter lack of energy.
Germany is done in a snap if the imports are cut.
Everyone will walk the plank in the end to postpone arrival at the logical conclusion.
If a European leader needs to be dumped...They will be gone.
The US scam is ultimately better than the European scam.
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