Free Republic

ROME (AFP) - Italy's new anti-establishment government took power on Friday, ending months of deadlock that saw the eurozone's third largest economy narrowly avoid snap elections after a last-gasp coalition deal. New Prime Minister Giuseppe Conte, 53, was sworn in at the head of the first populist government in an EU founding member that was forged by the Five Star Movement and the far-right League. "The new right is in power," declared left-leaning daily La Repubblica. The handover of power follows an inconclusive March election and months of political turmoil which had spooked global financial markets and spread unease among...

PARIS (AFP) - A populist government in Rome, political instability in Madrid, democratic crises in the east and a transatlantic trade war to the west: the European Union faces threats and challenges on multiple fronts. On Friday, Italy's President Sergio Mattarella swore in an anti-establishment and eurosceptic government comprising the Five Star Movement and the far-right League. Their agenda -- increased public spending in the EU's most indebted nation, coupled with anti-German rhetoric -- has led to concerns for the bloc's future and its single currency, the euro. Also Friday, Spain's parliament ousted Prime Minister Mariano Rajoy in a no-confidence...

Events are moving so fast in Europe these days, it’s almost impossible to keep up. While much of the attention is being hogged by political developments, including the election in the Netherlands, Reuters published a report warning that the European banking sector may face even higher bad loan risks if the ECB begins to scale back its monetary stimulus programs, something it has already begun, albeit extremely tentatively. The total stock of non-performing loans (NPL) in the EU is estimated at over €1 trillion, or 5.4% of total loans, a ratio three times higher than in other major regions of...

The European Union is eroding from its periphery and it is collapsing in pieces even in Germany and France. It is highly fragile and if real recessionary winds blow the EU will start to crumble at a faster pace. We say the faster, the better. The bureaucrats are clinging to the dream, but the dream has morphed into something very different for many in Europe. We can’t say that we’re disappointed. From The Telegraph) “The Stability and Growth Pact has more or less failed. Market discipline is done away with by ECB interventions. So there is no fiscal control mechanism...

Full title: Dow sheds 200 points as bank stocks fall sharply; Deutsche Bank tumbles 8% U.S. stocks traded sharply lower on Thursday after banking stocks fell sharply. The three major indexes hit session lows shortly after Bloomberg reported that approximately 10 hedge funds were reducing their exposure to embattled European bank Deutsche Bank. Deutsche shares fell 8 percent in afternoon trade.

DB stock is now in a full panic sell-off as I write this. It just hit another new all-time NYSE low on by the heaviest volume ever in the stock since its 2001 NYSE listing. It’s currently down almost 10%. No doubt the Central Banks will try to bounce it.

German officials could be about to find themselves in an uncomfortable position: Being called on to show they're ready to rescue a bank in a part of the world where such operations are considered taboo. Deutsche Bank came under intensified market fire Thursday, the latest salvo being a Bloomberg report that a small number of hedge funds are trimming their sails at the German bank. In a broad perspective, the move would represent a minor dent in Deutsche's derivatives clearing business. Barry Bausano, chairman of Deutsche's hedge fund business, told CNBC on Thursday that while there have been some outflows,...

Negative interest rates are spreading like a virus. Central banks in the Eurozone, Switzerland, Sweden, and Japan all have below-zero policy rates. “NIRP,” as economists call a negative interest rate policy, is a desperation move—but the only move those central banks have. The Federal Reserve hasn’t followed—yet. When the next recession strikes, I believe Janet Yellen will choose to break the zero lower bound. The rationale was laid out in Jackson Hole. Look behind the headlines and you’ll see the Fed already preparing for NIRP. In theory, negative rates should encourage consumers and businesses to spend more freely and stimulate...

The European Central Bank left its stimulus measures on hold Thursday and warned governments in the 19 country euro currency union that they need to do more to help the economy grow and push up inflation to healthier levels. The bank kept its key interest rates unchanged and decided against extending the duration of its existing bond-buying stimulus program. Bank President Mario Draghi seemed relatively confident about the economy and less inclined to hint at more stimulus than some analysts had expected. Instead, he used his news conference to urge governments to do their part. He said that implementation of...

Large parts of the eurozone are slipping deeper into a deflationary trap despite negative interest rates and one trillion euros of quantitative easing by the European Central Bank, leaving the currency bloc with no safety buffer when the next global recession hits. The ECB is close to exhausting its ammunition and appears increasingly powerless to do more under the legal constraints of its mandate. It has downgraded its growth forecast for the next two years, citing the uncertainties of Brexit, and admitted that it has little chance of meeting its 2pc inflation target this decade, insisting that it is now...

At first (literally the day the Fed announced QE1) it was just "tinfoil fringe blogs" who predicted the failure of the central bank's attempt to boost the economy by printing money, instead warning that all the Fed would do is unleash an unprecedented income and wealth divide that may culminate in civil war and hyperinflation. Then, gradually, analysts, pundits and even the mainstream press admitted the truth, i.e., that tin-foilers were right all along, until recently even the Fed's own mouthpiece, Jon Hilsenrath, one day before the Jackson Hole meeting wrote that "Years of Fed Missteps Fueled Disillusion With the...

The 19-country eurozone lost some economic momentum in August, largely because of a slowdown in Germany, a closely watched survey showed Monday, days ahead of another possible stimulus package from the European Central Bank. Financial information company IHS Markit said its purchasing managers’ index — a broad gauge of economic activity — for the eurozone fell to a 19-month low of 52.9 points in August from 53.2 the previous month. The fall was unexpected as the initial estimate for August was 53.3. In spite of the fall, the eurozone is still growing, albeit sluggishly as anything above 50 indicates expansion....

The first half of 2016 has been a roller-coaster for financial markets. A combination of uncertainties surrounding the U.K.'s vote to leave the European Union and weaker-than-expected corporate earnings results across the region means a tough second half looms. European banks, in particular, have had a very tough six months as the shock and volatility around Brexit sent banking stocks south. Major European banks like Deutsche Bank and Credit Suisse saw their shares in free-fall after the referendum's results were announced. In the U.K., RBS was the worst-hit, with its shares plunging by more than 30 percent since June 24....

Economy minister Sigmar Gabriel warns UK must take responsibility for vote that has left Europe as an ‘unstable continent’ __ German economy minister Sigmar Gabriel has said that Britain must not be allowed to “keep the nice things” that come with EU membership without taking responsibility for the fallout from Brexit. As Theresa May called a cabinet meeting to discuss the UK government’s Brexit strategy on Wednesday, Gabriel warned if the issue was badly handled and other member countries followed Britain’s lead, Europe would go “down the drain”. “Brexit is bad but it won’t hurt us as much economically as...

http://www.express.co.uk/news/world/698305/Deutsche-Bank-financial-crisis-EU-Angela-Merkel 'We should nationalise German banks' Warning Deutsche Bank teetering on edge of CRISIS A TOP economist has warned that Germany's biggest bank is teetering on the edge of crisis and they only way to protect it against future shocks is to nationalise it. By SIMON OSBORNE 20:03, Tue, Aug 9, 2016 | UPDATED: 21:00, Tue, Aug 9, 2016 Germany central bank, the Deutsche Bank, would be hit hard in a new financial crisis Martin Hellwig said stress tests carried out by the European Central Bank revealed the Deutsche Bank would be left in a precarious position in the event of...

Madrid (AFP) - Spain's public debt rose above 100 percent in the first quarter to its highest level in 20 years, the central bank said Wednesday as Madrid faces an EU sanctions threat for public overspending. Debt as a proportion of economic output hit 100.5 percent in the first quarter up from 99.2 percent at the end of 2015, the bank said in a statement.

Among those who manage gobs of money, the possibility that Britain might actually disavow the European Union seemed until recently like a remote and even outlandish possibility. But about a week before voters go to the polls to determine their future, masters of finance are suddenly absorbing the prospect that Britain might really walk, unleashing anxiety and uncertainty throughout the global economy. Like local responders readying sandbags as a hurricane menaces their shores, financial industry overseers have been quietly drawing up contingency plans while surveying the expensive havoc a so-called Brexit is already wreaking. Central bankers from London to Washington...

The U.S. intelligence community was responsible for usurping Europeans' right to self-government, in an effort to impose what Obama recently called “one of the greatest political and economic achievements of modern times.” As British voters prepare to vote on secession from the European Union super-state, the Obama administration's bizarre intervention to support the pro-EU side has sparked a fresh examination of the shadowy origins of the controversial European regime. Under scrutiny is the critical backing the EU and its predecessor outfits received at every step of the way from top globalists within the U.S. government, and in particular from the...

As Draghi said in a speech to Asian government officials and business leaders on Monday, there’s still a great deal more that can be done to punish Europe’s hordes of savers, the central banker’s scapegoat du jour for all that ails Europe’s debt-laden economy. The low or negative interest rates plaguing Europe are a symptom of a much bigger problem, he said: the compression of investment returns due to a massive global savings glut. To our great amazement, it’s this purported glut — and not his monetary policies — that lies behind the historic decline in interest rates. Inevitably, whenever...

Some 95 percent of the 220 billion euros disbursed to Greece since the start of the financial crisis as loans from the bailout mechanism has been directed toward saving the European banks. That means about 210 billion euros was eventually channeled to the eurozone credit sector while just 5 percent ended up in state coffers, according to a study by the European School of Management and Technology (ESMT) in Berlin. “Europe and the International Monetary Fund have in previous years mainly saved the banks and other private creditors,” concluded the report, published yesterday in German newspaper Handelsblatt. ESMT director Jorg...