EuroZone Deathwatch

by MIKE WHITNEY

There’s no way to overstate the calamity that’s unfolding across the Atlantic. The eurozone is imploding. The smart money has already fled EU banks for safe quarters in the US while political leaders frantically look for a way to prevent a seemingly-unavoidable meltdown. Here’s an excerpt from a post at The Streetlight blog that explains what’s going on:

“…ECB data seems to indicate that monetary financial institutions (MFIs) in Europe have been moving their deposits out of European banks. Where is that money going?….

European banks are shifting their cash assets out of European banks and putting much of them into US banks…. This has happened at a significant rate, with a net transatlantic flow from European to US banks that probably totals close to half a trillion dollars in just six months.”

(“Europe’s Banking System: The Transatlantic Cash Flow”, The Streetlight blog)

The eurozone is experiencing a slow-motion run on its banking system. And–while the ECB’s emergency loans and other commitments have kept the panic from spreading to households and other retail customers–the big money continues to flee as leaders of large financial institutions realize that a political solution to the monetary union’s troubles is still out-of-reach.

The spreads on Spanish and Italian sovereign bonds have risen to nosebleed levels while the interest rate on the Greek 1-year bond has topped 70 percent, a tacit admission that Greece has lost access to the capital m

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Welcome September 7, 2011 7:17

September 7, 2011

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EuroZone Deathwatch

by MIKE WHITNEY

There’s no way to overstate the calamity that’s unfolding across the Atlantic. The eurozone is imploding. The smart money has already fled EU banks for safe quarters in the US while political leaders frantically look for a way to prevent a seemingly-unavoidable meltdown. Here’s an excerpt from a post at The Streetlight blog that explains what’s going on:

“…ECB data seems to indicate that monetary financial institutions (MFIs) in Europe have been moving their deposits out of European banks. Where is that money going?….

European banks are shifting their cash assets out of European banks and putting much of them into US banks…. This has happened at a significant rate, with a net transatlantic flow from European to US banks that probably totals close to half a trillion dollars in just six months.”

(“Europe’s Banking System: The Transatlantic Cash Flow”, The Streetlight blog)

The eurozone is experiencing a slow-motion run on its banking system. And–while the ECB’s emergency loans and other commitments have kept the panic from spreading to households and other retail customers–the big money continues to flee as leaders of large financial institutions realize that a political solution to the monetary union’s troubles is still out-of-reach.

The spreads on Spanish and Italian sovereign bonds have risen to nosebleed levels while the interest rate on the Greek 1-year bond has topped 70 percent, a tacit admission that Greece has lost access to the capital m
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EuroZone Deathwatch