"Disconnect between financial markets and fundamentals, potential market volatility, financial vulnerabilities and policy uncertainties could, however, derail the modest recovery. The positive assessment reflected in market valuations appears disconnected from real economy prospects." - OECD
Greek private sector bank deposits declined in January for the second month in a row, driven by renewed concerns over the country's neverending bailout. Business and household deposits fell by €1.63 billion, or 1.34% month-on-month to €119.75 billion ($126.8 billion), the lowest level since November 2001.
While Trump seemingly remains the only topic worthy of discussion blanketing the airwaves, as the following chart from Goldman demonstrates, it has been China where policy uncertainty has stealthily exploded in the past three months.
TCW, the US asset manager that runs the world’s largest actively managed bond fund, has eliminated its exposure to eurozone bank debt over fears these lenders are “excessively risky”, its CIO, Tad Rivelle, told the FT.
What will the year ahead look like for Europe? 2017 will be another chapter in the European Union’s slow unraveling (which even Soros sees as inevitable)... a process that has been underway for over a decade.
Moments ago DBRS announced that, just as warned earlier in the week, the rating agency stripped Italy of its last A-rating, when it downgraded italy from A (low) to BBB (high), in the process raising the cost of borrowing ECB funds for the country's struggling lenders.
It took a while, but the world are slowly coming to grips with the simple fact the Chinese miracle is built on a pile of debt with only an unconstrained printing press to support it. The danger is obviously that the political establishment in China will be in dire need to distract the hordes of angry masses that are about to lose their life savings.
In a last ditch attempt to avoid a state bailout, on Monday Italy's Monte Paschi will begin a share sale process as it aims to complete a capital raise of €5 billion ($5.2 billion) before Christmas, Bloomberg reported overnight. The bank will canvass institutional investor interest through Thursday, while the offer for retail investors will end on Wednesday.