European Highlights

These are some of the more important stories concerning the European economy.

Amid the recent earnings reports, equity markets have been trading mostly lower. The main contributor to that is Arcelor Mittal which came sub expectation and reported a quarterly income of 1.59 billion euros, while the general consensus stood at 1.78 billion euros. This result is important given the position Arcelor Mittal holds in the worlds industrial structure. As the biggest steel producer Mittal is a good indicator of what the future industrial production would look like. Not good. Also, the equities were pushed even lower by the results of German industrial behemoth Thyssen Krupp AG, which was hurt by the strong Euro and non existent steel demand. 

The IMF is at it again. Ukraine, amid the grave economic situation will hold talks with the IMF bankers on conditions of 16.4 billion dollar loan. IMF bankers will request restructuring of pensions,union and wages. 

In the newly published report by the ECB, the Central Bank warns about the potential deflation, due to the contracted credit in the EU and the US. Business investment and consumer spending to remain non-existent in the foreseeable future, while equity markets enjoy sectoral inflation. Central bankers laugh.

There is a recent development in Hungary. Amid the worst crisis in the modern history, Hungary accepted a 5 billion euros bail out by the ECB. They warn about the severity of the economy, fearing another Iceland. While the general look was pointed towards the Baltic States, especially Lithuania, the condition further deteriorated in Hungary, putting into danger Austrian,Italian and German banks which hold high exposure to the region.

The future of British banking behemoth Northern Rock is to be decided by Euro bureaucrats. The nationalized British bank will know its future one of these days, after the EU votes on the proposal of breaking the bank into two parts and the selling them to naive PE firms or even more idiotic banks. UK taxpayers probably never to see a dime of the purchasing price.

Here are some other important headlines and articles:

• IMF officials meet in Ukraine to discuss wages and pensions ( Bloomberg )
• Polish Central Bank may leave rates unchanged for fourth straight month (Bloomberg)
• European, Asian stock retreat ( Bloomberg )
• The future of UK banks ( Guardian live blog )
• Deflation fears as UK and US credit contracts ( Telegraph ) 
• Dollar hegemony for another century ( Telegraph )
• UK likely to be in the shitter for quite some time ( Guardian )
• FSA tells providers to compensate investors with LEH backed structured products ( (Telegraph )
• McDonald's leaves Iceland,98% decline in obesity ( Telegraph )
• UK to break Northern Rock, Lloyds and RBS ( The Independent )
• BP profits crush expectations ( The Independent )

Those were today's most important news headlines from Europe. Keep your eye on the further development in Northern Rock, RBS and Lloyds, and the IMF situation with Ukraine. Given the historical background and a strong socialist mentality, something tells me that the Unions will most likely refuse to follow IMF advice. This could pressure Ukraine even more to subordinate itself to Russian interest. Also, keep your eye on the development in Hungary and Austria, because that might be the first domino to fall. Given the recent positive results of Swedish banks, and their exposure to the Baltic Region, we can fairly say that the situation in that region is improving, and that the imminent threat of collapse has been shaken off. Thank you for reading.

Comments

[Enkidu]

Much appreciated Cheeky

[earnyermoney]

CB

Thank you for your work. I'd be nice to include relevant geopolitical stories as these issues directly affect investment decisions. Geopolitical issues are rarely covered in the United States. I have a keen interest on the deteriorating relationship between Russia and the United States and the struggle for influence in Central Europe, Central Asia and the Middle East.

[AR]

Thanks Cheeky  /  We follow foreign markets closely, however, a comprehensive MACRO view is a great asset to ZH readers in helping them manage their assets in the U.S.  Good work.  If we can assist, let us know.

[Cheeky Bastard]

AR, thank you. Yes, always. If you have some data or some information, you can mail it to me at [e-mail]

[defender]

Cheeky, great info / insight as always.  Have you heard anything about the politicians in germany getting a different vaccine than the rest of the people?  Not sure what sources this guy (Dr. Berninger, a german) has but here is a link for it:

http://www.youtube.com/watch?v=Sm8Is6LBiXk

And on a side note, whoever flagged cheeky's post needs shot.

[I need more cowbell]

Bravo. We Americans are so country-centric we basically ignore the rest of the world. Thanks mucho for the Euro update and your perspectives.

This needs to become a weekly or more often feature.

[anynonmous]

and here is as a link I found to a CNBS alternative Live Business TV from Europe (but it's in German)

German Business Live Stream TV

[Lionhead]

+10; we need more insight globally & daily/weekly features to get the Big Picture perspective. I see the viewers for ZH are worldwide. Hope you continue with this CB. We're starved for news with the MSM.