Greece lied its way into the euro launch in 2001, cloaking its unsound public finances from the EU’s nearly blind eye. The boost to credibility allowed Greece to borrow its way to unsustainable growth and exorbitant spending. The financial crisis of 2008 tore away the façade. In October 2009 Greece revealed a budget deficit of 12.5% of GDP, later revised to 15.7%, and warned it would default absent substantial aid or debt forgiveness   It’s been downhill ever since, thanks to the EU’s good intentions. The EU and the ECB helped Greece to bury its debt problem. Yet Greek debt didn’t die. Instead it turned zombie. It rouses periodically to terrorize the living. It has now roused again—yields on two-year Greek bonds have jumped 400 basis points in the past

This entry was posted in Europe and tagged , , , , , by Kent Osband.

About Kent Osband

Dr. Osband is an American economist, strategist, financial risk analyst and longtime student of Bulgaria. He is the author of two well-known books on quantitative risk analysis (Iceberg Risk: An Adventure in Portfolio Theory and Pandora Risk: Uncertainty at the Core of Finance) and has served both in the public (IMF, WB) and private sectors (Goldman Sachs, CSFB, Fortress Investments).

  The recent sale of a significant minority equity stake in Rosneft caught the markets and analysts by surprise. The available information to date is limited only to a couple of announcements revealing few details.  The deal is indeed of great complexity and the available details are not sufficient to decipher it. An initial analysis however leaves the impression that the announced buying consortium of Qatar’s sovereign wealth fund and Glencore might be not the only beneficial owner of the privatized 19.5% stake in Rosneft.   On December 5, Rosneft issued 600 billion Rubles locally placed bonds maturing in 10 years. The Russian market is clearly not deep enough for an issue of that magnitude and such a long tenor.  Most probably, the money ultimately came from the Russian central

This entry was posted in The Region and tagged , , , , , by A. Sorensen Henrik.

About A. Sorensen Henrik

Henrik A. Sorensen is a natural resources economist with more than four decades of professional experience. Mr. Sorensen has a BSc in Mechanical Engineering from the University of Gothenburg and MBA from McCombs School. In the first part of his career he has specialized in project finance of oil production, infrastructure, and downstream operations in the US, South-east Asia, Latin America, and later, the former Soviet Union. Since 2007 Mr. Sorensen specializes predominantly in research related to economics of natural resources.
Photo: Wikimedia Commons/ Markus Bernet

  Deutsche Bank, which is Europe’s largest investment bank, and one of the largest of the world, has attracted a lot of attention from regulators, analysts and media lately. News have not been good. In June the Fed announced the firm’s U.S. operation failed — twice in a row — the Fed’s stress test. An IMF research report awarded it the title of “the biggest contributor of systemic risk”. Impact of Brexit was predicted to take a material toll on its investment bank, headquartered in London.  As a result, Deutsche’s stock has been in a tear, with the market capitalization falling below EUR18bn, a quarter of its book value. Since early 2016 its credit default swaps (a measure of its credit risk) has sharply grown and has been trading in