If it seems as though we have focused on crises in Europe for years, that’s because we have. The seemingly endless impasses of Greece and its possible spillover effects on the rest of Europe and then, by extension, on the global financial system, have beset markets and investors for nearly six years.
Read moreThe Envestnet Edge, July 2015
The Envestnet Edge from July 2015
Read moreDon’t Believe the Hype About Greece
The Greek vote is important for the economic future of Greece. And it may damage the economies of Greece’s European neighbors. But Greece is an economic minnow that becomes larger only due to symbolism and collective bad decisions in the Eurozone.
Read moreThe Greek Catastrophe Is Finally Here (Unless It Isn’t)
It was a grim weekend in Greece, and it’s likely to be an even grimmer week ahead, both for the Greeks and the European (and possibly world) economy. What wouldnormally be the beginning of the profitable tourist season—a summer idyll in the lovely Greek islands and crowds piling into the Parthenon—has turned into the next chapter of the slow-motion economic train wreck that the world has been witnessing queasily since 2011. Now the wreck is finally here, and the only real question—the one none of us can really answer—is whether it will be modest or huge.
Read moreAre the Germans Going to Crash the World Economy?
As Greece squeezes by without a “Grexit” — earlier this week eurozone ministers approved a four-month bailout extension— markets, politicians, pundits are far calmer today than they were a few years ago. Back then, in the fall of 2011, the prospect of a eurozone without Greece sent global markets into turmoil. Granted, it was bad year, what with a near-U.S. debt default and pervasive fears of a European Monetary Union undone by mountains of bad bank debt. By late November 2011, international credit markets were exhibiting the same danger signs of stress that followed the collapse of Lehman Brothers in September 2008, and it appeared that the long-feared next stage of a global financial implosion was at hand. It took the simultaneously actions of the world’s central banks, followed by a “final” bailout of Greece by the “troika” of the IMF, the European Central Bank and the Eurozone countries to the tune of 240 billion Euros.
Read moreDon’t Turn America Into Europe
The Europeans—some of them, anyway—are finally beginning to concede that austerity has gone awry. There’s less growth, more structural unemployment, little bank lending and economic contraction. And now, of course, we have a political backlash in the person of Alexis Tsipras, the leader of Greece’s Syriza party, who upon winning the prime ministership last Sunday declared grandly (and probably over-optimistically) that Greece will now “leave behind the austerity that ruined it.”
Read moreWhat If Default Isn't a Disaster?
Before we begin, let it be said that the looming possibility of the U.S.’s default on its own debt is a not-insignificant issue. Let it also be said that the U.S. government may be unwilling to pay interest on its multi-trillion dollar publicly-held debt as of mid-October, and that this carries substantial risks. And, finally, let it be said that this is something we should most definitely avoid.
Read moreEurope's Doomsdayers Were Wrong in 2010, 2011, and 2012—and They're Wrong Today
After a pleasant lull over the past six months, panic over the fate of Europe has flared once again. Just weeks ago the elites of Davos exuded confidence that the crisis had passed; the events of the past weeks showed how ephemeral such certainty can be.
Read moreStandard & Poor’s and Other Ratings Agencies Must End Their Power Trip
In early December, the ratings agency Standard & Poor’s placed all 15 Eurozone countries under what it calls “negative credit watch.” Typically, that means there is an even possibility that it will downgrade the credit of these countries within 90 days.
Read moreElection Shows Greece Unlikely to Cause Financial Meltdown, Despite Gloom and Doom
The eyes of the financial world were on Greece once again this weekend, as the Hellenes went to the polls for the second time in six weeks. It’s fair to say that the world hasn’t been this focused on Greece for more than 2,000 years, and the ability of this nation of 11 million people to hold the world in thrall is, on the face of it, rather extraordinary.
Read moreMarkets Relieved at Spain Bailout Deal, Financial World Still Worried
Over the weekend, the Spanish government bowed to the necessity of seeking a bailout for its banking system. The amount was large: $125 billion in loans from the European Union to stave off the collapse of Spanish banks. The result was greeted with relief by financial markets around the world, with stocks initially rising, bond prices falling, and the outflows from southern European banks for the moment stanched.
Read moreChaos Over New Elections Deepens Fear of a Greece Chain Reaction
For the third May in a row, events in Greece have taken on global significance. The spark this May, the rising debts and plunging growth of the onetime hub of civilization, is largely the same. But why does the fate of a country with not quite 11 million people and about $300 billion in GDP matter so much? Why does a nation with barely more people than one new Chinese city and an economy hardly larger than the state of Maryland continue to roil international markets? Not since the Trojan War has the fate of the Hellenes been so central to humankind.
Read moreHow Bankers Saved the World From a Euro Meltdown
As Americans went about their lives this past week recovering from turkey, bemused by the latest Herman Cain dramas, the world almost changed dramatically. Fortunately, the largest central banks joined forces to stem the mounting financial crisis—for now.
Read moreZachary Karabell: Don't Worry About Greece
Greece may be spooking financial markets, but not to worry, says The Daily Beast's Zachary Karabell. The reason? Greece just doesn't have an economy large enough to cause to a major meltdown in Europe, much less the world.
Read moreEuropean Markets & Debt Crisis with Zachary Karabell, Daily Beast Contributor
European Markets & Debt Crisis with Zachary Karabell, Daily Beast Contributor
Read moreGermany’s Risky Eurozone Bailout a Positive Step in Right Direction
The German government voted in favor of a European bailout fund designed to aid Greece tentatively set at $600 billion. That rivals in size the bailouts the United States passed at the urging of then-Treasury Secretary Henry Paulson in the fall of 2008 and again in February 2009, which prevented a complete implosion of the financial system whose consequences would have made the resulting recession and market plunge look inconsequential by comparison.
Read moreGreece and the Growing Economic Crisis: Why Europe Won’t Implode
Europe will act to prevent Greece from defaulting and triggering a global financial crisis
Read moreEurope’s Economic Crisis: Could Default in Greece, Eurozone Sink Us?
As Americans fixate on the battle for the Republican presidential nominationand the continuing travails of the U.S. economy, the real story in financial land is what is happening in Europe. The issues aren’t new: concerns over the contagion of a default of Greek debt, or Irish or Portuguese or Italian, have been percolating for more than a year and a half. But there is a definite sense of late that these issues are potentially spinning out of control.
Read moreObama’s Job Speech Not to Blame for Economic Market Turmoil
It was another rough day for global markets. The major indices in the United States were down nearly three percent, and European markets fared even worse. That much is undebatable. The reasons, however, are. And the reasons initially given were, today at least, totally wrong.
Read moreDerivatives to the Rescue? How ‘Betting Against’ the U.S. Could Prevent A Default Crisis
Wednesday’s plunge in the markets signaled that the impasse over the debt ceiling ,if it continues, will eventually trigger a substantial market sell-off. That belief itself should have been a warning sign; when investors dismiss what is known as “tail risk,” only trouble ensues.
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