Fixing the euro zone debt crisis while it’s time

Posted on 24. May, 2010 by Jean Jacques Ohana in Weekly Focus

We have already stated in our macroeconomic analysis of sovereign debt issues that a country’s solvency risk is at least tridimensional, depending on the current account, the government balance and the outstanding amount of debt.
Indeed, a deficit cut would require either an improvement of the current account balance or an increase in private debt. To [...]

Is Chinese Real Estate bubble popping?

Posted on 12. May, 2010 by Jean Jacques Ohana in Weekly Focus

Maybe the European debt issues have distracted investors from paying attention to the signs of weakness in the alleged “growth zone”: Asia and specifically greater China.
For more than a month, Riskelia’s Trends and Bubbles Radar has identified a major weakness: Chinese real estate. The Trend stands at -68% with no specific bear exaggeration. This signal [...]

Sovereign debt vulnerability and systemic risk

Posted on 10. May, 2010 by Jean Jacques Ohana in Weekly Focus

The chronicle of the financial events of the last three months has been crystal clear:
A global bubble on all risky assets developed since the unprecedented accommodative policy set up by Central Banks and Governments. From a monetary point of view, global rates were set around 0% and liquidity injections in the US have not been [...]

The Greek bailout: a poker game between Europe and debt holders

Posted on 03. May, 2010 by Jean Jacques Ohana in Weekly Focus

The European countries announced with great pomp that the giant rescue plan for Greece has been finalized. The plan consists in 110 Bil EUR endorsed by the European countries for 80 Bil and by the IMF for the remaining part. The loans will be freed as soon as next week before the redemption of the [...]