Sovereign debt problem and the risk of financial dislocation

Posted on 27. Apr, 2010 by Jean Jacques Ohana in Weekly Focus

We have emphasized several times that the weak link of the financial system is sovereign debt solvency and that the latter is closely linked to European Banks and Cash liquidity. Now this scenario is materializing as confirmed by Riskelia’s Financial Markets Radar.
Greece’s solvency problem has turned into a major liquidity crisis preventing Greece from refinancing [...]

Greece: from solvency to liquidity risk

Posted on 25. Apr, 2010 by Jean Jacques Ohana in Weekly Focus

We have highlighted in our macro-economic perspective of G10 sovereign debt issues that Greece  follows an unsustainable public debt path as well as Portugal, Spain and in a more remote future the UK, the US and France.
In the last days, the Greek debt crisis has taken a new turn as the  spread between the Greek [...]

The Goldman Sachs scandal: the void of responsibilities

Posted on 21. Apr, 2010 by Jean Jacques Ohana in Weekly Focus

In 2006, Paulson asked Goldman Sachs to structure a Collateralized Debt Obligation (named ABACUS), made of a pool of Residential Mortgage Backed Securities in order to place a bet on the burst on the real estate bubble. A Credit Default Swap (CDS) on the CDO (or “synthetic CDO”) was then structured, so that Paulson could [...]

Riskelia’s Financial Markets Radar

Posted on 19. Apr, 2010 by Jean Jacques Ohana in Weekly Focus

We are happy to publish Riskelia’s Radar as of today. This market intelligence tool is refreshed on a weekly basis and can be subscribed from Riskelia. The report shows anticipative trends and bubbles indicators as well as risk aversion on every asset class.
Riskelia’s commentary:
Trends remain strongly bullish on risky asset classes while bubbles go on [...]

Inflation or deflation?

Posted on 05. Apr, 2010 by Steve Ohana in Weekly Focus

We have already emphasized that the weak link of the financial system is the G10 solvency issue. Despite the continuous rise in financial assets which may last farther out, particularly in the commodity complex, the solvency problem is still present at the heart of the financial system as reflected by a snapshot of Riskelia’s Radar [...]