SlideShare une entreprise Scribd logo
1  sur  5
Télécharger pour lire hors ligne
September 6, 2011

Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks
For the last 2 years, if the Eye on the Market had a single dominant theme, it was that a common monetary policy does
not by itself create a durable monetary union; that European asset markets were not adequately pricing in the risk that
the European Monetary Union could fail, or require massive transfers to save it; and that austerity with no FX
devaluation is doomed to failure. During this time, our skepticism about the EMU and European asset markets has been
rewarded at every turn. For those interested, here’s the latest grisly news of the week….
  •     European manufacturing and new orders surveys are generating the worst readings since May 2009 (particularly sharp
  declines in France and Italy); German growth fell from 5.0% in Q1 to 0.5% in Q2
  •     Both Italy and Spain struggled in August to attract interest in their public debt, and now both countries face much bigger
  auction schedules in the fall. Spanish and Italian banks also have large funding needs which are likely to be a problem if their
  respective sovereigns cannot borrow from the debt markets. Asian buying is critical; Spain relies on Asia for 5x the demand
  they get from the US. Current IMF and bilateral EU borrowing facilities are not big enough if Italy needs to access them.
  •     EU bank shares have plummeted due to funding concerns, as the IMF and EU argue about capital adequacy of EU banks
  •     Italian government bond yields rose by 0.5% yesterday as Italy struggles with ECB demands for a zero-deficit plan1 by
  2013; the ECB does not appear to be in a rush to restore stability before the Italian plan is “fully confirmed and implemented”
  •     The IMF-sponsored Greece adjustment program is in shambles2, for all the reasons we expected it would be
  •     Imbalances at the root of the region’s problems have not improved fast enough (see chart). Without an FX devaluation
  to close the gap, the periphery is consigned to a self-reinforcing cycle of low growth and austerity. While many see the EMU
  as an integration project, it has resulted in the largest growth and employment disparities in decades (see charts on page 5).
This saga has been going on now for 24 months, making it the Berlin Alexanderplatz of Sovereign Debt Crises. However, I
think we’re moving closer to the end-game, which begins and ends in Germany. German political parties likely to run the
Bundestag after the next elections are in favor of socializing these problems through Eurobonds, if necessary. But the German
public generally opposes Eurobonds (see chart), perhaps since the potential cost of a permanent fiscal transfer union rivals the
cost of German unification and post-WWI Versailles reparations (see EoTM August 6, 2011).
     Something's still rotten near Denmark                                        No Federalization without Representation?
     Current account deficit, % of GDP                                            Percent of Bundestag, and percent of German population
    4%                                                                            80%                                        German voters:
                                             Euro exchange rate fixed
              France, Germany, U.K.                                               70%
    2%
                                                                                  60%         German politicians:
    0%                                                                                            Left Party
                                                                                  50%
    -2%                                                                           40%               Greens
    -4%                                                                           30%
                Greece, Italy, Ireland,
                Portugal, Spain                                                   20%
    -6%                                                                                              SPD
                                                                                  10%
    -8%                                                                           0%
       1975       1980      1986          1991   1997      2002     2008                      In favor of Eurobonds           Opposed to Eurobonds

    Source: OECD, J.P. Morgan Private Bank, U.K. Office of National Statistics.   Source: Der Spiegel, TNS Emnid Global Market Research, N24 Media GmbH.

The end-game is mostly about who pays for the accumulated, unrealized losses of the last decade, and who finances the
transition to whatever comes next. Markets are nervous, since Europe has not figured this out yet. To examine the various
factions, I consulted Peter Cembalest, who specializes in conceptualization of such phenomena. Peter (age 9) uses Lego
Minifigures as a medium, and assisted me with the diorama on the next page. It identifies the 12 players in the EMU Debt
Crisis most likely to affect policy from here; red lines indicate who each entity believes should be stuck with the cost. The
attribution of views is my own, based on an analysis of what people have said, what they have done, and how they have voted.

1
 Italy runs practically the tightest budget deficit in Europe; the burden of prior debt is the bigger problem. Italy was able to bring debt levels
down in the 1990’s, but this resulted from four factors: higher growth resulting from an undervalued exchange rate from 1992 to 1997; EMU
convergence which brought down interest rates from 12% to 3%; popular support for austerity, with the promise of integration and all it
would bring; and financial engineering (off balance sheet swaps). None of these tailwinds exist today.
2
  July/August Greek retail sales fell at the fastest rate in three years, bank deposit flight continues, its privatization efforts are off to a very
slow start, and the government may miss its fiscal deficit target by 1% or so. What is happening in Greece is a textbook response to
austerity without an FX adjustment and easy monetary policy, according to the IMF’s own handbook (“Macroeconomic Effects of Fiscal
Consolidation”, October 2010). The IMF’s reported disappointment with Greece, given this context, is ridiculous.

                                                                                                                                                           1
September 6, 2011

Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks
The political impasse in Europe: who should pay for current and future sovereign/bank bailouts?                                               5
          1                                                                           3
                                                    2                                                                   4




                                                                                                                                          9
                                                                          7                   8

                          6




                                                                                                                                                      12
                 10


                                                                               11




                                                                                                                            Key: Arrows denote where each entity
                                                                                                                            would shift the burden of bailout costs
[1] Spain, Italy and the rest of the Euro               [2] The CDU, CSU and FDP are the 3 German            [3] By requiring collateral for its share of EFSF
Periphery believe the ECB should buy bonds,             parties which control the Bundestag and are          exposure to Greece, Finland raised the ante on
prevent spreads from rising and give them               against doing more than what Germany has             France and Germany, whose banks have much more
time to implement austerity plans. Italy is the         already committed to. Minority factions within       exposure to the Periphery. Finland wants the bailout
flash point, with sovereign debt equal to 25%           all 3 are against proposed EFSF expansion in         to reflect actual exposure, rather than ECB capital
of GDP rolling in the next year, plus 100 bn in         size and scope. The CSU circulated a paper           weights. The Dutch now want the same treatment.
Italian bank debt. Italy has undergone                  calling for an ‘insolvency procedure” for Euro-
austerity before (1990’s), but that was when            zone sovereigns instead of an open-ended             [6] The IMF has taken a mostly passive role, lending
the promise of EMU integration was the                  transfer union. The 3 parties seek greater labor     money and overseeing austerity plans in Greece that
carrot. This promise has proven to be illusory;         and pension reforms in the Periphery, and are        are failing miserably. Ken Rogoff at Harvard refers
Italy grew faster before joining the EMU.               strongly opposed to premature introduction of        to their role as “sycophantic”. Comments on bank
                                                        Eurobonds. If more than 440 bn is needed, they       shareholder dilution by new IMF head LaGarde may
[4] The Social Democrats and Greens are                 would begrudgingly accept more ECB buying.           suggest a change in attitude (hence the dotted line).
opposition parties in the Bundestag, but if an
early election were held today, polls suggest           [5] The Bundesbank is the ultimate protector of      [9] France is relying on the ECB to handle what the
they would be in control. Both parties support          German monetary and fiscal interests, and is         EFSF cannot. While France supports greater fiscal
expanding the EFSF beyond 440 bn if needed,             very concerned with steps already taken to deal      federalization, if this were done via further EFSF
and may accept fiscal federalization if                 with the crisis. Their strong preference would       enlargement, it could risk France’s AAA rating.
necessary to preserve the EMU.                          be for EMU countries looking for aid to first
                                                        implement austerity and pension and labor            [11] The EU Commission and Euro Group Finance
[7] The European Central Bank is purchasing             market reforms (i.e., German Reunification           Ministers, chaired by Jose Manuel Barroso and Jean-
Spanish and Italian bonds in the secondary              steps). Bondholder losses (“creditor                 Claude Juncker, support ECB bond buying and fiscal
market to bring yields down with the intention          participation”) should take place before             federalization in a variety of forms. They oppose
of facilitating better primary auctions. This did       shareholders are subsidized by taxpayers.            Franco-German incrementalism, but may not have
not work in Ireland, Greece or Portugal. Spain                                                               enough power to change it.
and Italy yields declined by 1% once the ECB            [10] EU taxpayers in Core countries would be
began buying, but have since drifted higher.            affected by various efforts to federalize costs of   [12] So far, EU bondholders and shareholders have
The ECB does not like its current role as fiscal        the EMU sovereign debt crisis, either through        been subsidized by the ECB and EU taxpayers. The
agent, and believes that EU taxpayers should            EFSF expansion, or introduction of Eurobonds.        latest EU bank stress tests called for an additional Eur
bear the cost of solving the crisis.                    Lots of arrows point in this general direction.      2.5 billion of capital. This is not a misprint.

[8] Poland, after a long period of wanting to enter the EMU, is waiting for a clearer picture of who will bear the costs of the sovereign debt crisis.
The Polish Finance Minster is calling for more ECB buying of sovereign debt, a much larger EFSF, and warned that Poland will not want to join the
EMU until the Euro is earthquake-proof. "The fundamental problem of the Eurozone is not an economic but a political one," he explained. "The
choice is: much deeper macroeconomic integration in the Eurozone or its collapse. There is no third way."
                                                                                                                                                                  2
September 6, 2011

Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks
There wasn’t room for every entity that impacts European decision-making. The German Constitutional
Court is another unique agent, and could disrupt the bailout process in a variety of ways. We also could have               Iceland
included Iceland, whose influence lay in its different and more successful adjustment. Iceland struggled with
high inflation and unemployment after its 2009 devaluation, but now benefits from rapidly improving
economic and financial market prospects3. If today’s diorama analysis borders on the absurd, so does
maintaining the fiction that accumulation of massive public and private sector claims in Europe can
somehow be engineered away. European banking sector liabilities are 3 to 4 times the size of European
GDP, which dwarfs the roughly 1:1 ratio in the US. To be clear, there are few signs of systemic funding
strains in the interbank market, and most European banks are well funded for the next couple of months. But if sovereign risk
continues to rise, this would be the next flashpoint in the crisis. Bottom line: we remain underinvested in Europe in a big way.

As for the United States, arguing that US growth will be 1.0%-1.5% and not negative might seem like debating how
many angels can dance on the head of a pin (in other words, a poor use of time, since both are below what is needed for a
durable recovery). But for what it’s worth, that’s our view right now: 1% and not a recession. Housing and labor market data
are pretty bad, and consumer confidence surveys plummeted in August. However, confidence surveys have under-predicted
actual consumer spending for the last couple of years, and as of July, spending was well above levels indicative of recessions.
    Consumption growth below trend but far from recession                       Recent gap between spending and confidence
    territory, Percent, YoY                                                     Index                                               Percent change, YoY
    8%                                                                         115
                                                                                                                                    Real Personal        6%
    6%                                                                         105                                                  Consumption
                                                                                                                                    Expenditures         4%
    4%                                                                          95                                                     (RHS)
                                                                                                                                                         2%
    2%                                                                          85

    0%                                                                          75                                                                       0%
                                                                                                         Hurricane
                                                                                                          Katrina
-2%                                                                             65                                      Consumer                         -2%
                                         3 months annualized                                                         Confidence (LHS)
-4%                                                                             55                                                                       -4%
  Jan-50 Nov-58 Aug-67 Jun-76 Mar-85 Dec-93 Oct-02                 Jul-11        1995    1997     1999     2001   2003    2005    2007   2009    2011
    Source: Bureau of Economic Analysis. Shaded bars denote recessions.         Source: University of Michigan, Bureau of Economic Analysis.

Manufacturing also held up through July, and while there were signs of weakness, the August ISM manufacturing survey is not
pointing to recession. However, the best argument against a recession is unfortunately also an indictment for how weak
the recovery is. The chart below shows the combined level of durable goods spending (by consumers) and fixed investment
(by businesses, in property and equipment). At 20% of GDP, it’s close to its lowest level in more than 50 years. Since a decline
in this measure tends to cause recessions, our view is that there’s barely enough of this kind of spending to fall in the first place.

     Durable goods and fixed investment at multi-cycle lows                      S&P 500 price since April 2010
     Percent of GDP                                                              Level
    30%                                                                         1400
                                                                                1350
    28%
                                                                                1300
    26%
                                                                                                  Bernanke's
                                                                                1250             Jackson Hole
    24%                                                                         1200            speech on QE2

                                                                                1150
    22%
                                                                                1100
    20%
                                                                                1050                                                     Sept. 6 open
    18%                                                                         1000
       1947    1955    1963    1971    1979    1987     1995    2003       2011    Apr-10       Jul-10      Oct-10       Jan-11    Apr-11       Jul-11
     Source: Bureau of Economic Analysis. Shaded bars denote recessions.         Source: Bloomberg.


3
  In Iceland, inflation is back at 2%, its growth rates are projected at 3.5%-4.0%, unemployment of 9% is half of EU periphery levels, and its
recent 5-year bond issue was 2 times oversubscribed.
                                                                                                                                                               3
September 6, 2011

Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks
Either way, whether growth is 1% or 0%, the Fed is likely to respond with additional quantitative easing (QE) of some kind at
its September meeting. As we noted last time, there are reasons to question the long-term benefits of such actions:
•                               Make long-term interest rates lower? They’re already low (2% on 10 year Treasuries)
•                               Add liquidity through asset purchases? There’s plenty of liquidity in the system already
•                               “Encourage” banks to lend more money by eliminating interest on excess reserves held at the Fed? Banks are struggling
                                with insufficient loan demand, a glut of deposits, and surveys show a substantial relaxation of lending standards
•                               Buy corporate bonds? Investment grade spreads are already 85% of their way back to 2007 levels
The beneficial impact of QE2 on the US economy was not sufficient, which is partly why US equity markets eventually gave
back much of the speculative gains which took place in Q4 2010. We have little reason to think that the outcome will be
different next time. Equity markets are priced cheaply relative to expectations of future earnings, but without more evidence
that QE is having more of a positive impact on the US economy, we believe QE-driven equity market gains will be temporary.
As a consequence of problems in Europe and the US, low equity valuations are widespread. As we showed a couple of
weeks ago, multiples applied to earnings and book value are pricing in a high likelihood of a recession (see chart). This is
understandable, as countries like Italy are forced into “zero-deficit” plans by markets increasingly nervous about the highest
levels of government debt since Italian unification in 1861. Our sense is that US equity markets are pricing in around a 15%-
20% decline in earnings, which is consistent with recessions before the tech collapse and credit crisis, which were much worse.
    The men who fell to earth                                                                              Earnings declines during US recessions
    Price/earnings and price/book ratios vs. long-term averages                                            Percent decline - peak to trough
                                16x
                                                                                                                       1953- 1957- 1960-   1974-     1981- 1990-    2008-
    Price to forward earnings




                                14x                                                                               1949 1954 1958 1961 1970 1975 1980 1982 1991 2001 2009
                                                         HK                                               10%

                                12x                                                                         0%
                                               Japan
                                                                                       US                 -10%
                                10x                          Australia        Sw itzerland
                                        Germany                                                           -20%
                                                       Korea        UK                                                                      Maginot Line
                                 8x                                        China      Long-term average   -30%
                                            Spain                                     Current
                                                       Brazil                                             -40%
                                 6x
                                      0.8          1.8 1.3              2.3              2.8              -50%
                                       Price to book value
                                                                                                          -60%
    Source: J.P. Morgan Securities LLC. P/B long-term avgs since 1980 except for Korea, China,
    Brazil (1995). Fwd P/E long-term avgs since 1987 except for Brazil, China (1995).                       Source: Haver Analytics, Barclays Capital.


The investment opportunities that make the most sense to us in this environment:
• Leveraged loans, after recent price declines
• Opportunities in merger arbitrage, where deal spreads4 have widened from 8% to 16% in August
• Asian currencies, given the Fed’s “zero-or-Nero” monetary policy5
• Equity notes which allow for upside participation, but also provide protection down to spring-2009 levels. Some of our
   favorite global large-cap companies (domiciled in the US, Europe and Asia) now trade with dividend yields of close to 5%.
• US bank preferred stock (both Trust Preferreds trading at or below Par, and those eligible for qualified dividend treatment).
   While the earnings of some issuing banks may be under pressure due to ongoing litigation risks, declining net interest
   margins and the lack of a recovery in home prices, we consider these risks more of an issue for common stock, rather than
   preferred stock. As one indication of magnitude, Morgan Stanley’s Large Cap Bank Analyst Team cut 2012 EPS estimates
   by 6% last month, which would not entail payment risks for preferred stock.
• Inflation is an easier problem to deal with than deleveraging, deflation and austerity budgets. As a result, we are looking at
   opportunities in Asian equities and credit, which we expect to improve once the monetary tightening cycle is complete.
Michael Cembalest
Chief Investment Officer

4
 Deal spreads refer to the difference between the announced acquisition price of a given target company, and where it is currently trading.
This difference primarily reflects the uncertainty around the deal closing, and the cost of capital. The numbers above were computed for
August 1 and August 30, for all announced US transactions above $500 million.
5
    The Fed appears to believe that without zero interest rates, the US would face an environment of asset liquidation and Nero-like disarray.
                                                                                                                                                                            4
September 6, 2011

Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks
Appendix charts
The likely political successors to the CDU in Germany support Federalization of these problems through Eurobonds, if
necessary. However, it has become increasingly less clear that restructuring debt, recapitalizing systemically-important banks
and allowing for orderly exits from the EMU would be a more costly option than the one Europe is now pursuing.. What the
charts below show is that the European Monetary Union, designed to harmonize European differences, has ended up
exacerbating them.

 European Periphery: stuck in neutral
 Real GDP growth, percent, YoY, as of Q2 2011

                                                                                                                                        Core: Austria, Belgium,
    6%
                                                                                                                                        Finland, France, Germany,
    4%
                                                                                                                                        Netherland, Luxembourg

    2%

    0%

   -2%                                                                                                                     Periphery: Greece, Ireland,
                                                                                                                           Italy, Spain, Portugal
   -4%

  -6%
     1971                1976             1981             1986             1991             1996                              2001                2006                2011
 Source: Statistical Office of the European Communities , OECD, IMF, J.P. Morgan Private Bank.


                                                                                       Unemployment rate difference between Periphery and
ISM              Institute for Supply Management                                       Germany, Percent, Peripheral rates weighted by population
QE               Quantitative Easing                                                    6%
EU               European Union                                                         5%
ECB              European Central Bank                                                  4%
                                                                                        3%
EMU              European Monetary Union
                                                                                        2%
EFSF             European Financial Stability Facility
                                                                                        1%
CDU              Christian Democratic Union                                             0%
CSU              Christian Social Union of Bavaria                                     -1%
FDP              Free Democratic Party                                                 -2%
                                                                                       -3%
Berlin Alexanderplatz is a 15.5 hour film by Rainer                                    -4%
Werner Fassbinder produced in 1980. Lego Minifigures                                      1971 1975 1979 1983 1987 1991 1995 1999 2003 2007
were first produced in 1978; 3.7 billion have been                                     Source: J.P. Morgan Private Bank, Bank of Spain, Bank of Portugal, OECD,
                                                                                       CSO, NSS, IMF.
produced since then.

The material contained herein is intended as a general market commentary. Opinions expressed herein are those of Michael Cembalest and may differ from those of other J.P.
Morgan employees and affiliates. This information in no way constitutes J.P. Morgan research and should not be treated as such. Further, the views expressed herein may
differ from that contained in J.P. Morgan research reports. The above summary/prices/quotes/statistics have been obtained from sources deemed to be reliable, but we do not
guarantee their accuracy or completeness, any yield referenced is indicative and subject to change. Past performance is not a guarantee of future results. References to the
performance or character of our portfolios generally refer to our Balanced Model Portfolios constructed by J.P. Morgan. It is a proxy for client performance and may not
represent actual transactions or investments in client accounts. The model portfolio can be implemented across brokerage or managed accounts depending on the unique
objectives of each client and is serviced through distinct legal entities licensed for specific activities. Bank, trust and investment management services are provided by J.P.
Morgan Chase Bank, N.A, and its affiliates. Securities are offered through J.P. Morgan Securities LLC (JPMS), Member NYSE, FINRA and SIPC. Securities products
purchased or sold through JPMS are not insured by the Federal Deposit Insurance Corporation ("FDIC"); are not deposits or other obligations of its bank or thrift affiliates
and are not guaranteed by its bank or thrift affiliates; and are subject to investment risks, including possible loss of the principal invested. Not all investment ideas referenced
are suitable for all investors. Speak with your J.P. Morgan Representative concerning your personal situation. This material is not intended as an offer or solicitation for the
purchase or sale of any financial instrument. Private Investments may engage in leveraging and other speculative practices that may increase the risk of investment loss, can be
highly illiquid, are not required to provide periodic pricing or valuations to investors and may involve complex tax structures and delays in distributing important tax
information. Typically such investment ideas can only be offered to suitable investors through a confidential offering memorandum which fully describes all terms, conditions,
and risks.

IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including
any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with
JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. Note that J.P. Morgan is not a licensed insurance
provider. © 2011 JPMorgan Chase & Co; All rights reserved


                                                                                                                                                                                   5

Contenu connexe

Tendances

Nordic Outlook November 2010
Nordic Outlook November 2010Nordic Outlook November 2010
Nordic Outlook November 2010The Benche
 
Global Outlook Robin Bew June 17 Public
Global Outlook Robin Bew June 17 PublicGlobal Outlook Robin Bew June 17 Public
Global Outlook Robin Bew June 17 Publicmcleodb
 
Capital Markets Insights Winter 2018
Capital Markets Insights Winter 2018Capital Markets Insights Winter 2018
Capital Markets Insights Winter 2018Duff & Phelps
 
Asia Analysis, No. 13, 16 March 2011
Asia Analysis, No. 13, 16 March 2011Asia Analysis, No. 13, 16 March 2011
Asia Analysis, No. 13, 16 March 2011Swedbank
 
The 1990’s financial crises in Nordic countries
The 1990’s financial crises in Nordic countriesThe 1990’s financial crises in Nordic countries
The 1990’s financial crises in Nordic countriesPeter Ho
 
Economic outlook spring_2012 final
Economic outlook spring_2012 finalEconomic outlook spring_2012 final
Economic outlook spring_2012 finalSalt Lake Chamber
 
To the Point, No.5 - May 29, 2012
To the Point, No.5 - May 29, 2012To the Point, No.5 - May 29, 2012
To the Point, No.5 - May 29, 2012Swedbank
 
Vlerick event chief economists 17 01-2012
Vlerick event chief economists 17 01-2012Vlerick event chief economists 17 01-2012
Vlerick event chief economists 17 01-2012Vlerick_Alumni
 
The Global Economy No. 9 - December 20, 2011
The Global Economy No. 9 -  December 20, 2011The Global Economy No. 9 -  December 20, 2011
The Global Economy No. 9 - December 20, 2011Swedbank
 
Economic growth 2011
Economic growth 2011Economic growth 2011
Economic growth 2011mattbentley34
 
Can the EU survive the Eurozone Crisis?
Can the EU survive the Eurozone Crisis?Can the EU survive the Eurozone Crisis?
Can the EU survive the Eurozone Crisis?Massimiliano Hasan
 
From the Floor 10october11
From the Floor 10october11From the Floor 10october11
From the Floor 10october11ETX_Capital
 
QNB’s expects global outlook to be gloomier than the OECD
QNB’s expects global outlook to be gloomier than the OECDQNB’s expects global outlook to be gloomier than the OECD
QNB’s expects global outlook to be gloomier than the OECDQNB Group
 
Nordic outlook august 2010
Nordic outlook august 2010Nordic outlook august 2010
Nordic outlook august 2010The Benche
 
August 2012 Commentary
August 2012 CommentaryAugust 2012 Commentary
August 2012 CommentaryMartin Leduc
 
January 2011 Commentary
January 2011 CommentaryJanuary 2011 Commentary
January 2011 CommentaryMartin Leduc
 

Tendances (19)

Nordic Outlook November 2010
Nordic Outlook November 2010Nordic Outlook November 2010
Nordic Outlook November 2010
 
Global Outlook Robin Bew June 17 Public
Global Outlook Robin Bew June 17 PublicGlobal Outlook Robin Bew June 17 Public
Global Outlook Robin Bew June 17 Public
 
Capital Markets Insights Winter 2018
Capital Markets Insights Winter 2018Capital Markets Insights Winter 2018
Capital Markets Insights Winter 2018
 
Asia Analysis, No. 13, 16 March 2011
Asia Analysis, No. 13, 16 March 2011Asia Analysis, No. 13, 16 March 2011
Asia Analysis, No. 13, 16 March 2011
 
European npl report 2011
European npl report 2011European npl report 2011
European npl report 2011
 
The 1990’s financial crises in Nordic countries
The 1990’s financial crises in Nordic countriesThe 1990’s financial crises in Nordic countries
The 1990’s financial crises in Nordic countries
 
Economic outlook spring_2012 final
Economic outlook spring_2012 finalEconomic outlook spring_2012 final
Economic outlook spring_2012 final
 
To the Point, No.5 - May 29, 2012
To the Point, No.5 - May 29, 2012To the Point, No.5 - May 29, 2012
To the Point, No.5 - May 29, 2012
 
Vlerick event chief economists 17 01-2012
Vlerick event chief economists 17 01-2012Vlerick event chief economists 17 01-2012
Vlerick event chief economists 17 01-2012
 
The UN/DESA Expert Group Meeting on the World Economy
The UN/DESA Expert Group Meeting on the World EconomyThe UN/DESA Expert Group Meeting on the World Economy
The UN/DESA Expert Group Meeting on the World Economy
 
The Global Economy No. 9 - December 20, 2011
The Global Economy No. 9 -  December 20, 2011The Global Economy No. 9 -  December 20, 2011
The Global Economy No. 9 - December 20, 2011
 
Economic growth 2011
Economic growth 2011Economic growth 2011
Economic growth 2011
 
Can the EU survive the Eurozone Crisis?
Can the EU survive the Eurozone Crisis?Can the EU survive the Eurozone Crisis?
Can the EU survive the Eurozone Crisis?
 
From the Floor 10october11
From the Floor 10october11From the Floor 10october11
From the Floor 10october11
 
QNB’s expects global outlook to be gloomier than the OECD
QNB’s expects global outlook to be gloomier than the OECDQNB’s expects global outlook to be gloomier than the OECD
QNB’s expects global outlook to be gloomier than the OECD
 
Nordic outlook august 2010
Nordic outlook august 2010Nordic outlook august 2010
Nordic outlook august 2010
 
August 2012 Commentary
August 2012 CommentaryAugust 2012 Commentary
August 2012 Commentary
 
Institutional seminar
Institutional seminarInstitutional seminar
Institutional seminar
 
January 2011 Commentary
January 2011 CommentaryJanuary 2011 Commentary
January 2011 Commentary
 

En vedette

Concordia Staete
Concordia StaeteConcordia Staete
Concordia Staetephileasfox
 
Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...
Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...
Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...Mousselmal Tarik
 
PR in a changing world
PR in a changing worldPR in a changing world
PR in a changing worldedelman.milan
 
UTS Future Library - CCA Educause
UTS Future Library - CCA EducauseUTS Future Library - CCA Educause
UTS Future Library - CCA EducauseMal Booth
 
Design Thinking and UTS Library
Design Thinking and UTS LibraryDesign Thinking and UTS Library
Design Thinking and UTS LibraryMal Booth
 
Insa cyber intelligence 2011
Insa cyber intelligence 2011Insa cyber intelligence 2011
Insa cyber intelligence 2011Mousselmal Tarik
 
Presentation1
Presentation1Presentation1
Presentation1shelydmb
 
UTS Library future service model (with notes)
UTS Library future service model (with notes)UTS Library future service model (with notes)
UTS Library future service model (with notes)Mal Booth
 
Edelman Trust Barometer 2007
Edelman Trust Barometer 2007Edelman Trust Barometer 2007
Edelman Trust Barometer 2007edelman.milan
 

En vedette (9)

Concordia Staete
Concordia StaeteConcordia Staete
Concordia Staete
 
Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...
Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...
Hii the convergence_of_google_and_bots_-_searching_for_security_vulnerabiliti...
 
PR in a changing world
PR in a changing worldPR in a changing world
PR in a changing world
 
UTS Future Library - CCA Educause
UTS Future Library - CCA EducauseUTS Future Library - CCA Educause
UTS Future Library - CCA Educause
 
Design Thinking and UTS Library
Design Thinking and UTS LibraryDesign Thinking and UTS Library
Design Thinking and UTS Library
 
Insa cyber intelligence 2011
Insa cyber intelligence 2011Insa cyber intelligence 2011
Insa cyber intelligence 2011
 
Presentation1
Presentation1Presentation1
Presentation1
 
UTS Library future service model (with notes)
UTS Library future service model (with notes)UTS Library future service model (with notes)
UTS Library future service model (with notes)
 
Edelman Trust Barometer 2007
Edelman Trust Barometer 2007Edelman Trust Barometer 2007
Edelman Trust Barometer 2007
 

Similaire à 09 06-11-eotm-european-minifigure-union

Ireland bailout what's next
Ireland bailout   what's nextIreland bailout   what's next
Ireland bailout what's nextMarkets Beyond
 
SEB Research: IMF leads enlarged rescue package for Greece
SEB Research: IMF leads enlarged rescue package for GreeceSEB Research: IMF leads enlarged rescue package for Greece
SEB Research: IMF leads enlarged rescue package for GreeceSEBgroup
 
Pensions and the European Debt Crisis
Pensions and the European Debt CrisisPensions and the European Debt Crisis
Pensions and the European Debt CrisisAegon
 
Eurozone this time is different or is it
Eurozone   this time is different or is itEurozone   this time is different or is it
Eurozone this time is different or is itMarkets Beyond
 
Stress test for banks in europe
Stress test for banks in europeStress test for banks in europe
Stress test for banks in europeMarkets Beyond
 
Europe: The State of the Banking System
Europe:  The State of the Banking SystemEurope:  The State of the Banking System
Europe: The State of the Banking SystemMarkets Beyond
 
European union
European unionEuropean union
European unionDona Joy
 
Europe’s focus is shifting from austerity to growth
Europe’s focus is shifting from austerity to growthEurope’s focus is shifting from austerity to growth
Europe’s focus is shifting from austerity to growthQNB Group
 
European Debt Crisis
European Debt CrisisEuropean Debt Crisis
European Debt CrisisCharu Rastogi
 
Hsbc - Alliott Group
Hsbc - Alliott Group Hsbc - Alliott Group
Hsbc - Alliott Group Alliott Group
 
Eurozone as we have known it end of story
Eurozone as we have known it   end of storyEurozone as we have known it   end of story
Eurozone as we have known it end of storyMarkets Beyond
 
Econ greece economy ppt
Econ greece economy pptEcon greece economy ppt
Econ greece economy pptbw695x
 
Debt reduction without default
Debt reduction without defaultDebt reduction without default
Debt reduction without defaultitargeting
 
recent world trade crisis eurozone-debt-crisis
 recent world trade crisis eurozone-debt-crisis   recent world trade crisis eurozone-debt-crisis
recent world trade crisis eurozone-debt-crisis Shashank Singh
 
Eurozone debt crisis
Eurozone debt crisisEurozone debt crisis
Eurozone debt crisistomarricha
 
Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...
Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...
Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...Círculo de Empresarios
 
Understanding the european debt crisis
Understanding the european debt crisisUnderstanding the european debt crisis
Understanding the european debt crisisAmens Corner Capital
 
Eurozone Presentation
Eurozone PresentationEurozone Presentation
Eurozone PresentationDanielle Jack
 

Similaire à 09 06-11-eotm-european-minifigure-union (20)

Ireland bailout what's next
Ireland bailout   what's nextIreland bailout   what's next
Ireland bailout what's next
 
SEB Research: IMF leads enlarged rescue package for Greece
SEB Research: IMF leads enlarged rescue package for GreeceSEB Research: IMF leads enlarged rescue package for Greece
SEB Research: IMF leads enlarged rescue package for Greece
 
Pensions and the European Debt Crisis
Pensions and the European Debt CrisisPensions and the European Debt Crisis
Pensions and the European Debt Crisis
 
Eurozone this time is different or is it
Eurozone   this time is different or is itEurozone   this time is different or is it
Eurozone this time is different or is it
 
Stress test for banks in europe
Stress test for banks in europeStress test for banks in europe
Stress test for banks in europe
 
Europe: The State of the Banking System
Europe:  The State of the Banking SystemEurope:  The State of the Banking System
Europe: The State of the Banking System
 
European union
European unionEuropean union
European union
 
Understanding the Eurozone Crisis
Understanding the Eurozone CrisisUnderstanding the Eurozone Crisis
Understanding the Eurozone Crisis
 
Europe’s focus is shifting from austerity to growth
Europe’s focus is shifting from austerity to growthEurope’s focus is shifting from austerity to growth
Europe’s focus is shifting from austerity to growth
 
European Debt Crisis
European Debt CrisisEuropean Debt Crisis
European Debt Crisis
 
Hsbc - Alliott Group
Hsbc - Alliott Group Hsbc - Alliott Group
Hsbc - Alliott Group
 
Eurozone as we have known it end of story
Eurozone as we have known it   end of storyEurozone as we have known it   end of story
Eurozone as we have known it end of story
 
Econ greece economy ppt
Econ greece economy pptEcon greece economy ppt
Econ greece economy ppt
 
Debt reduction without default
Debt reduction without defaultDebt reduction without default
Debt reduction without default
 
recent world trade crisis eurozone-debt-crisis
 recent world trade crisis eurozone-debt-crisis   recent world trade crisis eurozone-debt-crisis
recent world trade crisis eurozone-debt-crisis
 
Italian_NPLs
Italian_NPLsItalian_NPLs
Italian_NPLs
 
Eurozone debt crisis
Eurozone debt crisisEurozone debt crisis
Eurozone debt crisis
 
Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...
Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...
Breaking the common fate of banks and governments by Daniel Gros and Cinzia A...
 
Understanding the european debt crisis
Understanding the european debt crisisUnderstanding the european debt crisis
Understanding the european debt crisis
 
Eurozone Presentation
Eurozone PresentationEurozone Presentation
Eurozone Presentation
 

Plus de Mousselmal Tarik

Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »
Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »
Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »Mousselmal Tarik
 
The anatomy of russian information warfare
The anatomy of russian information warfareThe anatomy of russian information warfare
The anatomy of russian information warfareMousselmal Tarik
 
Fox news vs. anonymous (Propaganda made in USA)
Fox news vs. anonymous (Propaganda made in USA)Fox news vs. anonymous (Propaganda made in USA)
Fox news vs. anonymous (Propaganda made in USA)Mousselmal Tarik
 
Cia culture-intelligence-berrett-cultural topography
Cia culture-intelligence-berrett-cultural topographyCia culture-intelligence-berrett-cultural topography
Cia culture-intelligence-berrett-cultural topographyMousselmal Tarik
 
Night For Life Dossier De Presse
Night For Life   Dossier De PresseNight For Life   Dossier De Presse
Night For Life Dossier De PresseMousselmal Tarik
 
Les Echos 051009 Total Mauvaise Image
Les Echos 051009 Total Mauvaise ImageLes Echos 051009 Total Mauvaise Image
Les Echos 051009 Total Mauvaise ImageMousselmal Tarik
 
Les Echos 2009 Alvin Toffler
Les Echos 2009 Alvin TofflerLes Echos 2009 Alvin Toffler
Les Echos 2009 Alvin TofflerMousselmal Tarik
 
Bhusa09 Miller Fuzzing Phone Paper
Bhusa09 Miller Fuzzing Phone PaperBhusa09 Miller Fuzzing Phone Paper
Bhusa09 Miller Fuzzing Phone PaperMousselmal Tarik
 
Eiaa Marketers Internet Ad Barometer 2009 Pr Presentation
Eiaa Marketers Internet Ad Barometer 2009 Pr PresentationEiaa Marketers Internet Ad Barometer 2009 Pr Presentation
Eiaa Marketers Internet Ad Barometer 2009 Pr PresentationMousselmal Tarik
 

Plus de Mousselmal Tarik (20)

Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »
Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »
Baromètre des Valeurs des Français 2014 : « Moi, beau et méchant ! »
 
The anatomy of russian information warfare
The anatomy of russian information warfareThe anatomy of russian information warfare
The anatomy of russian information warfare
 
China’s Three Warfares
China’s Three WarfaresChina’s Three Warfares
China’s Three Warfares
 
Fox news vs. anonymous (Propaganda made in USA)
Fox news vs. anonymous (Propaganda made in USA)Fox news vs. anonymous (Propaganda made in USA)
Fox news vs. anonymous (Propaganda made in USA)
 
Information as power
Information as power  Information as power
Information as power
 
Cia culture-intelligence-berrett-cultural topography
Cia culture-intelligence-berrett-cultural topographyCia culture-intelligence-berrett-cultural topography
Cia culture-intelligence-berrett-cultural topography
 
Stolen iPad CNN
Stolen iPad CNN Stolen iPad CNN
Stolen iPad CNN
 
Night For Life Dossier De Presse
Night For Life   Dossier De PresseNight For Life   Dossier De Presse
Night For Life Dossier De Presse
 
Les Echos 051009 Total Mauvaise Image
Les Echos 051009 Total Mauvaise ImageLes Echos 051009 Total Mauvaise Image
Les Echos 051009 Total Mauvaise Image
 
99 Tips E Version
99 Tips E Version99 Tips E Version
99 Tips E Version
 
Les Echos 2009 Alvin Toffler
Les Echos 2009 Alvin TofflerLes Echos 2009 Alvin Toffler
Les Echos 2009 Alvin Toffler
 
Right Ear
Right EarRight Ear
Right Ear
 
Twitter- Cyxymu
Twitter- CyxymuTwitter- Cyxymu
Twitter- Cyxymu
 
Bhusa09 Miller Fuzzing Phone Paper
Bhusa09 Miller Fuzzing Phone PaperBhusa09 Miller Fuzzing Phone Paper
Bhusa09 Miller Fuzzing Phone Paper
 
Eiaa Marketers Internet Ad Barometer 2009 Pr Presentation
Eiaa Marketers Internet Ad Barometer 2009 Pr PresentationEiaa Marketers Internet Ad Barometer 2009 Pr Presentation
Eiaa Marketers Internet Ad Barometer 2009 Pr Presentation
 
health is a new health
health is a new healthhealth is a new health
health is a new health
 
Pharell Vs Mcdonald's
Pharell Vs Mcdonald'sPharell Vs Mcdonald's
Pharell Vs Mcdonald's
 
Pharell Vs Mcdonald's
Pharell Vs Mcdonald'sPharell Vs Mcdonald's
Pharell Vs Mcdonald's
 
La Plaquette Des Restos
La Plaquette Des RestosLa Plaquette Des Restos
La Plaquette Des Restos
 
Pepsi Gravitational Field
Pepsi Gravitational FieldPepsi Gravitational Field
Pepsi Gravitational Field
 

Dernier

2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentationAdnet Communications
 
Stock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdfStock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdfMichael Silva
 
Pros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPark Place Finance LLC
 
The Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfThe Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfChampak Jhagmag
 
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdfjamie766122
 
Planning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyPlanning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyStefanMz
 
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...indexPub
 
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfMytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfNewsroom8
 
powerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismpowerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismrezeraaisla
 
Stock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfStock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfMichael Silva
 
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXAUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXkamikazekujoh
 
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBBIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBNeil Day
 
Challenging Factors of Rural Women Entrepreneurs in West Bengal
Challenging Factors of Rural Women Entrepreneurs in West  BengalChallenging Factors of Rural Women Entrepreneurs in West  Bengal
Challenging Factors of Rural Women Entrepreneurs in West BengalNabarun Chakraborty
 
Buy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinBuy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinJasper Colin
 
Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Commonwealth
 
Islamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowIslamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowhamidzafar6
 
Swift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfSwift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfNeo4j
 
First, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssFirst, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssAsad Zaman
 
renaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismrenaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismthxz2fdqxw
 

Dernier (20)

2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation
 
Closing Remarks International Women's Day 2024
Closing Remarks International Women's Day 2024Closing Remarks International Women's Day 2024
Closing Remarks International Women's Day 2024
 
Stock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdfStock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdf
 
Pros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR Loans
 
The Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfThe Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdf
 
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
 
Planning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyPlanning of societal re/production in a commonist society
Planning of societal re/production in a commonist society
 
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
 
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfMytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
 
powerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismpowerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalism
 
Stock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfStock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdf
 
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXAUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
 
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBBIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
 
Challenging Factors of Rural Women Entrepreneurs in West Bengal
Challenging Factors of Rural Women Entrepreneurs in West  BengalChallenging Factors of Rural Women Entrepreneurs in West  Bengal
Challenging Factors of Rural Women Entrepreneurs in West Bengal
 
Buy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinBuy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper Colin
 
Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]
 
Islamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowIslamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until now
 
Swift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfSwift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdf
 
First, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssFirst, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic Economicss
 
renaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismrenaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxism
 

09 06-11-eotm-european-minifigure-union

  • 1. September 6, 2011 Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks For the last 2 years, if the Eye on the Market had a single dominant theme, it was that a common monetary policy does not by itself create a durable monetary union; that European asset markets were not adequately pricing in the risk that the European Monetary Union could fail, or require massive transfers to save it; and that austerity with no FX devaluation is doomed to failure. During this time, our skepticism about the EMU and European asset markets has been rewarded at every turn. For those interested, here’s the latest grisly news of the week…. • European manufacturing and new orders surveys are generating the worst readings since May 2009 (particularly sharp declines in France and Italy); German growth fell from 5.0% in Q1 to 0.5% in Q2 • Both Italy and Spain struggled in August to attract interest in their public debt, and now both countries face much bigger auction schedules in the fall. Spanish and Italian banks also have large funding needs which are likely to be a problem if their respective sovereigns cannot borrow from the debt markets. Asian buying is critical; Spain relies on Asia for 5x the demand they get from the US. Current IMF and bilateral EU borrowing facilities are not big enough if Italy needs to access them. • EU bank shares have plummeted due to funding concerns, as the IMF and EU argue about capital adequacy of EU banks • Italian government bond yields rose by 0.5% yesterday as Italy struggles with ECB demands for a zero-deficit plan1 by 2013; the ECB does not appear to be in a rush to restore stability before the Italian plan is “fully confirmed and implemented” • The IMF-sponsored Greece adjustment program is in shambles2, for all the reasons we expected it would be • Imbalances at the root of the region’s problems have not improved fast enough (see chart). Without an FX devaluation to close the gap, the periphery is consigned to a self-reinforcing cycle of low growth and austerity. While many see the EMU as an integration project, it has resulted in the largest growth and employment disparities in decades (see charts on page 5). This saga has been going on now for 24 months, making it the Berlin Alexanderplatz of Sovereign Debt Crises. However, I think we’re moving closer to the end-game, which begins and ends in Germany. German political parties likely to run the Bundestag after the next elections are in favor of socializing these problems through Eurobonds, if necessary. But the German public generally opposes Eurobonds (see chart), perhaps since the potential cost of a permanent fiscal transfer union rivals the cost of German unification and post-WWI Versailles reparations (see EoTM August 6, 2011). Something's still rotten near Denmark No Federalization without Representation? Current account deficit, % of GDP Percent of Bundestag, and percent of German population 4% 80% German voters: Euro exchange rate fixed France, Germany, U.K. 70% 2% 60% German politicians: 0% Left Party 50% -2% 40% Greens -4% 30% Greece, Italy, Ireland, Portugal, Spain 20% -6% SPD 10% -8% 0% 1975 1980 1986 1991 1997 2002 2008 In favor of Eurobonds Opposed to Eurobonds Source: OECD, J.P. Morgan Private Bank, U.K. Office of National Statistics. Source: Der Spiegel, TNS Emnid Global Market Research, N24 Media GmbH. The end-game is mostly about who pays for the accumulated, unrealized losses of the last decade, and who finances the transition to whatever comes next. Markets are nervous, since Europe has not figured this out yet. To examine the various factions, I consulted Peter Cembalest, who specializes in conceptualization of such phenomena. Peter (age 9) uses Lego Minifigures as a medium, and assisted me with the diorama on the next page. It identifies the 12 players in the EMU Debt Crisis most likely to affect policy from here; red lines indicate who each entity believes should be stuck with the cost. The attribution of views is my own, based on an analysis of what people have said, what they have done, and how they have voted. 1 Italy runs practically the tightest budget deficit in Europe; the burden of prior debt is the bigger problem. Italy was able to bring debt levels down in the 1990’s, but this resulted from four factors: higher growth resulting from an undervalued exchange rate from 1992 to 1997; EMU convergence which brought down interest rates from 12% to 3%; popular support for austerity, with the promise of integration and all it would bring; and financial engineering (off balance sheet swaps). None of these tailwinds exist today. 2 July/August Greek retail sales fell at the fastest rate in three years, bank deposit flight continues, its privatization efforts are off to a very slow start, and the government may miss its fiscal deficit target by 1% or so. What is happening in Greece is a textbook response to austerity without an FX adjustment and easy monetary policy, according to the IMF’s own handbook (“Macroeconomic Effects of Fiscal Consolidation”, October 2010). The IMF’s reported disappointment with Greece, given this context, is ridiculous. 1
  • 2. September 6, 2011 Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks The political impasse in Europe: who should pay for current and future sovereign/bank bailouts? 5 1 3 2 4 9 7 8 6 12 10 11 Key: Arrows denote where each entity would shift the burden of bailout costs [1] Spain, Italy and the rest of the Euro [2] The CDU, CSU and FDP are the 3 German [3] By requiring collateral for its share of EFSF Periphery believe the ECB should buy bonds, parties which control the Bundestag and are exposure to Greece, Finland raised the ante on prevent spreads from rising and give them against doing more than what Germany has France and Germany, whose banks have much more time to implement austerity plans. Italy is the already committed to. Minority factions within exposure to the Periphery. Finland wants the bailout flash point, with sovereign debt equal to 25% all 3 are against proposed EFSF expansion in to reflect actual exposure, rather than ECB capital of GDP rolling in the next year, plus 100 bn in size and scope. The CSU circulated a paper weights. The Dutch now want the same treatment. Italian bank debt. Italy has undergone calling for an ‘insolvency procedure” for Euro- austerity before (1990’s), but that was when zone sovereigns instead of an open-ended [6] The IMF has taken a mostly passive role, lending the promise of EMU integration was the transfer union. The 3 parties seek greater labor money and overseeing austerity plans in Greece that carrot. This promise has proven to be illusory; and pension reforms in the Periphery, and are are failing miserably. Ken Rogoff at Harvard refers Italy grew faster before joining the EMU. strongly opposed to premature introduction of to their role as “sycophantic”. Comments on bank Eurobonds. If more than 440 bn is needed, they shareholder dilution by new IMF head LaGarde may [4] The Social Democrats and Greens are would begrudgingly accept more ECB buying. suggest a change in attitude (hence the dotted line). opposition parties in the Bundestag, but if an early election were held today, polls suggest [5] The Bundesbank is the ultimate protector of [9] France is relying on the ECB to handle what the they would be in control. Both parties support German monetary and fiscal interests, and is EFSF cannot. While France supports greater fiscal expanding the EFSF beyond 440 bn if needed, very concerned with steps already taken to deal federalization, if this were done via further EFSF and may accept fiscal federalization if with the crisis. Their strong preference would enlargement, it could risk France’s AAA rating. necessary to preserve the EMU. be for EMU countries looking for aid to first implement austerity and pension and labor [11] The EU Commission and Euro Group Finance [7] The European Central Bank is purchasing market reforms (i.e., German Reunification Ministers, chaired by Jose Manuel Barroso and Jean- Spanish and Italian bonds in the secondary steps). Bondholder losses (“creditor Claude Juncker, support ECB bond buying and fiscal market to bring yields down with the intention participation”) should take place before federalization in a variety of forms. They oppose of facilitating better primary auctions. This did shareholders are subsidized by taxpayers. Franco-German incrementalism, but may not have not work in Ireland, Greece or Portugal. Spain enough power to change it. and Italy yields declined by 1% once the ECB [10] EU taxpayers in Core countries would be began buying, but have since drifted higher. affected by various efforts to federalize costs of [12] So far, EU bondholders and shareholders have The ECB does not like its current role as fiscal the EMU sovereign debt crisis, either through been subsidized by the ECB and EU taxpayers. The agent, and believes that EU taxpayers should EFSF expansion, or introduction of Eurobonds. latest EU bank stress tests called for an additional Eur bear the cost of solving the crisis. Lots of arrows point in this general direction. 2.5 billion of capital. This is not a misprint. [8] Poland, after a long period of wanting to enter the EMU, is waiting for a clearer picture of who will bear the costs of the sovereign debt crisis. The Polish Finance Minster is calling for more ECB buying of sovereign debt, a much larger EFSF, and warned that Poland will not want to join the EMU until the Euro is earthquake-proof. "The fundamental problem of the Eurozone is not an economic but a political one," he explained. "The choice is: much deeper macroeconomic integration in the Eurozone or its collapse. There is no third way." 2
  • 3. September 6, 2011 Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks There wasn’t room for every entity that impacts European decision-making. The German Constitutional Court is another unique agent, and could disrupt the bailout process in a variety of ways. We also could have Iceland included Iceland, whose influence lay in its different and more successful adjustment. Iceland struggled with high inflation and unemployment after its 2009 devaluation, but now benefits from rapidly improving economic and financial market prospects3. If today’s diorama analysis borders on the absurd, so does maintaining the fiction that accumulation of massive public and private sector claims in Europe can somehow be engineered away. European banking sector liabilities are 3 to 4 times the size of European GDP, which dwarfs the roughly 1:1 ratio in the US. To be clear, there are few signs of systemic funding strains in the interbank market, and most European banks are well funded for the next couple of months. But if sovereign risk continues to rise, this would be the next flashpoint in the crisis. Bottom line: we remain underinvested in Europe in a big way. As for the United States, arguing that US growth will be 1.0%-1.5% and not negative might seem like debating how many angels can dance on the head of a pin (in other words, a poor use of time, since both are below what is needed for a durable recovery). But for what it’s worth, that’s our view right now: 1% and not a recession. Housing and labor market data are pretty bad, and consumer confidence surveys plummeted in August. However, confidence surveys have under-predicted actual consumer spending for the last couple of years, and as of July, spending was well above levels indicative of recessions. Consumption growth below trend but far from recession Recent gap between spending and confidence territory, Percent, YoY Index Percent change, YoY 8% 115 Real Personal 6% 6% 105 Consumption Expenditures 4% 4% 95 (RHS) 2% 2% 85 0% 75 0% Hurricane Katrina -2% 65 Consumer -2% 3 months annualized Confidence (LHS) -4% 55 -4% Jan-50 Nov-58 Aug-67 Jun-76 Mar-85 Dec-93 Oct-02 Jul-11 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: Bureau of Economic Analysis. Shaded bars denote recessions. Source: University of Michigan, Bureau of Economic Analysis. Manufacturing also held up through July, and while there were signs of weakness, the August ISM manufacturing survey is not pointing to recession. However, the best argument against a recession is unfortunately also an indictment for how weak the recovery is. The chart below shows the combined level of durable goods spending (by consumers) and fixed investment (by businesses, in property and equipment). At 20% of GDP, it’s close to its lowest level in more than 50 years. Since a decline in this measure tends to cause recessions, our view is that there’s barely enough of this kind of spending to fall in the first place. Durable goods and fixed investment at multi-cycle lows S&P 500 price since April 2010 Percent of GDP Level 30% 1400 1350 28% 1300 26% Bernanke's 1250 Jackson Hole 24% 1200 speech on QE2 1150 22% 1100 20% 1050 Sept. 6 open 18% 1000 1947 1955 1963 1971 1979 1987 1995 2003 2011 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Source: Bureau of Economic Analysis. Shaded bars denote recessions. Source: Bloomberg. 3 In Iceland, inflation is back at 2%, its growth rates are projected at 3.5%-4.0%, unemployment of 9% is half of EU periphery levels, and its recent 5-year bond issue was 2 times oversubscribed. 3
  • 4. September 6, 2011 Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks Either way, whether growth is 1% or 0%, the Fed is likely to respond with additional quantitative easing (QE) of some kind at its September meeting. As we noted last time, there are reasons to question the long-term benefits of such actions: • Make long-term interest rates lower? They’re already low (2% on 10 year Treasuries) • Add liquidity through asset purchases? There’s plenty of liquidity in the system already • “Encourage” banks to lend more money by eliminating interest on excess reserves held at the Fed? Banks are struggling with insufficient loan demand, a glut of deposits, and surveys show a substantial relaxation of lending standards • Buy corporate bonds? Investment grade spreads are already 85% of their way back to 2007 levels The beneficial impact of QE2 on the US economy was not sufficient, which is partly why US equity markets eventually gave back much of the speculative gains which took place in Q4 2010. We have little reason to think that the outcome will be different next time. Equity markets are priced cheaply relative to expectations of future earnings, but without more evidence that QE is having more of a positive impact on the US economy, we believe QE-driven equity market gains will be temporary. As a consequence of problems in Europe and the US, low equity valuations are widespread. As we showed a couple of weeks ago, multiples applied to earnings and book value are pricing in a high likelihood of a recession (see chart). This is understandable, as countries like Italy are forced into “zero-deficit” plans by markets increasingly nervous about the highest levels of government debt since Italian unification in 1861. Our sense is that US equity markets are pricing in around a 15%- 20% decline in earnings, which is consistent with recessions before the tech collapse and credit crisis, which were much worse. The men who fell to earth Earnings declines during US recessions Price/earnings and price/book ratios vs. long-term averages Percent decline - peak to trough 16x 1953- 1957- 1960- 1974- 1981- 1990- 2008- Price to forward earnings 14x 1949 1954 1958 1961 1970 1975 1980 1982 1991 2001 2009 HK 10% 12x 0% Japan US -10% 10x Australia Sw itzerland Germany -20% Korea UK Maginot Line 8x China Long-term average -30% Spain Current Brazil -40% 6x 0.8 1.8 1.3 2.3 2.8 -50% Price to book value -60% Source: J.P. Morgan Securities LLC. P/B long-term avgs since 1980 except for Korea, China, Brazil (1995). Fwd P/E long-term avgs since 1987 except for Brazil, China (1995). Source: Haver Analytics, Barclays Capital. The investment opportunities that make the most sense to us in this environment: • Leveraged loans, after recent price declines • Opportunities in merger arbitrage, where deal spreads4 have widened from 8% to 16% in August • Asian currencies, given the Fed’s “zero-or-Nero” monetary policy5 • Equity notes which allow for upside participation, but also provide protection down to spring-2009 levels. Some of our favorite global large-cap companies (domiciled in the US, Europe and Asia) now trade with dividend yields of close to 5%. • US bank preferred stock (both Trust Preferreds trading at or below Par, and those eligible for qualified dividend treatment). While the earnings of some issuing banks may be under pressure due to ongoing litigation risks, declining net interest margins and the lack of a recovery in home prices, we consider these risks more of an issue for common stock, rather than preferred stock. As one indication of magnitude, Morgan Stanley’s Large Cap Bank Analyst Team cut 2012 EPS estimates by 6% last month, which would not entail payment risks for preferred stock. • Inflation is an easier problem to deal with than deleveraging, deflation and austerity budgets. As a result, we are looking at opportunities in Asian equities and credit, which we expect to improve once the monetary tightening cycle is complete. Michael Cembalest Chief Investment Officer 4 Deal spreads refer to the difference between the announced acquisition price of a given target company, and where it is currently trading. This difference primarily reflects the uncertainty around the deal closing, and the cost of capital. The numbers above were computed for August 1 and August 30, for all announced US transactions above $500 million. 5 The Fed appears to believe that without zero interest rates, the US would face an environment of asset liquidation and Nero-like disarray. 4
  • 5. September 6, 2011 Topics: The debt crisis in the European Monetary Union as seen by a 9-year old, and US recession risks Appendix charts The likely political successors to the CDU in Germany support Federalization of these problems through Eurobonds, if necessary. However, it has become increasingly less clear that restructuring debt, recapitalizing systemically-important banks and allowing for orderly exits from the EMU would be a more costly option than the one Europe is now pursuing.. What the charts below show is that the European Monetary Union, designed to harmonize European differences, has ended up exacerbating them. European Periphery: stuck in neutral Real GDP growth, percent, YoY, as of Q2 2011 Core: Austria, Belgium, 6% Finland, France, Germany, 4% Netherland, Luxembourg 2% 0% -2% Periphery: Greece, Ireland, Italy, Spain, Portugal -4% -6% 1971 1976 1981 1986 1991 1996 2001 2006 2011 Source: Statistical Office of the European Communities , OECD, IMF, J.P. Morgan Private Bank. Unemployment rate difference between Periphery and ISM Institute for Supply Management Germany, Percent, Peripheral rates weighted by population QE Quantitative Easing 6% EU European Union 5% ECB European Central Bank 4% 3% EMU European Monetary Union 2% EFSF European Financial Stability Facility 1% CDU Christian Democratic Union 0% CSU Christian Social Union of Bavaria -1% FDP Free Democratic Party -2% -3% Berlin Alexanderplatz is a 15.5 hour film by Rainer -4% Werner Fassbinder produced in 1980. Lego Minifigures 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 were first produced in 1978; 3.7 billion have been Source: J.P. Morgan Private Bank, Bank of Spain, Bank of Portugal, OECD, CSO, NSS, IMF. produced since then. The material contained herein is intended as a general market commentary. Opinions expressed herein are those of Michael Cembalest and may differ from those of other J.P. Morgan employees and affiliates. This information in no way constitutes J.P. Morgan research and should not be treated as such. Further, the views expressed herein may differ from that contained in J.P. Morgan research reports. The above summary/prices/quotes/statistics have been obtained from sources deemed to be reliable, but we do not guarantee their accuracy or completeness, any yield referenced is indicative and subject to change. Past performance is not a guarantee of future results. References to the performance or character of our portfolios generally refer to our Balanced Model Portfolios constructed by J.P. Morgan. It is a proxy for client performance and may not represent actual transactions or investments in client accounts. The model portfolio can be implemented across brokerage or managed accounts depending on the unique objectives of each client and is serviced through distinct legal entities licensed for specific activities. Bank, trust and investment management services are provided by J.P. Morgan Chase Bank, N.A, and its affiliates. Securities are offered through J.P. Morgan Securities LLC (JPMS), Member NYSE, FINRA and SIPC. Securities products purchased or sold through JPMS are not insured by the Federal Deposit Insurance Corporation ("FDIC"); are not deposits or other obligations of its bank or thrift affiliates and are not guaranteed by its bank or thrift affiliates; and are subject to investment risks, including possible loss of the principal invested. Not all investment ideas referenced are suitable for all investors. Speak with your J.P. Morgan Representative concerning your personal situation. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Private Investments may engage in leveraging and other speculative practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuations to investors and may involve complex tax structures and delays in distributing important tax information. Typically such investment ideas can only be offered to suitable investors through a confidential offering memorandum which fully describes all terms, conditions, and risks. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. Note that J.P. Morgan is not a licensed insurance provider. © 2011 JPMorgan Chase & Co; All rights reserved 5