Let us play a quick game here. I will ask one question and you will brainstorm the first thing that pops to mind. Think of it as a version of the old game show classic Family Feud. In case you have forgotten the rules of Family Feud do not worry. We asked 100 people, in our case we may extend that to 100,000 people the following question and you try to find the five most common answers. Are you ready? It does not really matter. Here is the question: Which country do you first think of when you hear Eurozone debt contagion? Greece...
The Swiss National Bank enjoys the rare situation of a good problem to have. Four months after the SNB decided to cap the Swiss Franc and thanks to the Eurozone Debt Contagion its currency holdings skyrocketed by 50% and hit 365 billion Francs in June. SNB President Thomas Jordan now faces the difficult task of where and how to invest the excessive cash pile. The SNB decided to cap the EURCHF at 1.20 and has been hording Euros in order to defend the ceiling they set. The SNB usually invests foreign currencies in AAA rated bonds of...
Another weekend passed, another Eurozone crisis summit passed with it. There is a growing divide as on how to handle this Greek tragedy. You have Germany on one side which fights to maintain the current Euro structure which hurts Germany more than any other Eurozone member. Austria has voiced that Greece should get an additional two to three years and taken the opposite stance of the German camp which is against any delays, quelle surprise, while the Netherlands claimed that they would block any additional assistance to Greece such as a...
The Euro in its current form cannot and will not be able to exist. The markets have been relatively calm over the past few weeks which is also known as the eye of the storm. Several geopolitical problems currently enjoy this eye of the storm sense of calm and security. Policy makers as well as traders should be extremely careful as the clouds get dark faster than dumb money can congratulate them on what they believe has solved the Eurozone debt contagion. Their guard is down and they have no idea what calamity is moving their way. The ECB...
The European Union at the very least understands that a Eurozone banking union is a necessity moving forward in order to create a more stable Eurozone. The obvious step to undertake is to give the ECB the sole power to grant banking licenses and supervise the banking system for the 17 member Eurozone. Those exact proposals are swirling around Brussels as I type. September 12th is the date where such a plan may be unveiled. The European Commission is responsible for the plans and will work overtime during the next two weeks to hammer out a...
