Föhrenbergkreis Finanzwirtschaft

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Archive for 3. Juni 2018

Italy’s Slow-Motion Euro Train Wreck

Posted by hkarner - 3. Juni 2018

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

Brunello Rosa is co-founder, CEO, and head of research at Rosa & Roubini Associates, and a research associate at the Systemic Risk Centre at the London School of Economics.

Financial markets have finally woken up to the fact that Italy could soon be ruled by a populist government with designs to take the country out of the eurozone. And, given Italy’s tepid economic performance since adopting the single currency a generation ago, there is little reason to think that the current crisis is a one-off event.

NEW YORK – The possibility of a populist, Euroskeptic government coming to power in Italy has focused investors’ minds like few other events this year. The yield differential, or spread, between Italian and German bonds has widened sharply, indicating that investors view Italy as a riskier bet. And Italian equity prices have fallen – particularly in domestic bank shares, the best proxy of country risk – while insurance premia against a sovereign default have increased. There are even fears that Italy could trigger another global financial crisis, especially if a fresh election becomes a de facto referendum on the euro.

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The New Tech That Terrifies OPEC

Posted by hkarner - 3. Juni 2018

Date: 02-06-2018
Source: The Wall Street Journal

U.S. shale oil drillers are boosting efficiency with giant pads and walking rigs, lowering prices to a point that could hurt exporters like Saudi Arabia.

What doesn’t kill you makes you stronger.

Two years ago, it looked like Saudi Arabia was winning its fight against the U.S. shale oil industry by furiously pumping crude to drive down prices. Some drillers went bust and many more flirted with bankruptcy while oil drilling in places like West Texas and North Dakota collapsed.

The Saudi effort backfired. Instead of killing shale it spurred a wave of innovation that transformed drilling in the U.S. into a highly efficient industrial process, dramatically lowering costs and boosting output. During the next oil bust, it will be the Saudis who have to worry.

“High prices tend to create sloppiness in this industry because people focus only on growth,” says Doug Suttles, chief executive of shale driller Encana. “Downturns make you focus on cost because it’s the only thing you can control—the oil price is out of your hands.” Den Rest des Beitrags lesen »

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Aftereffects of Eurozone Crisis Plague Europe’s South

Posted by hkarner - 3. Juni 2018

Date: 02-06-2018
Source: The Wall Street Journal

Spain, Italy and Greece face political, social and economic fallout from bailouts, austerity budgets

ROME—This week’s high-profile political crises in Spain and Italy are making plain the social and economic scars Southern Europe bears almost a decade after the eurozone crisis, destabilizing traditional alliances and feeding political discontent.

In Italy—now home to Western Europe’s largest antiestablishment movement—two large outsider parties are coming to power, bolstered by the votes of millions of Italians stuck in a cycle of stubbornly high unemployment and poverty.

In Spain, a sitting premier was toppled in a no-confidence vote for the first time since the country emerged from the dictatorship of Francisco Franco. Prime Minister Mariano Rajoy, Europe’s longest serving leader, was ousted Friday in the wake of a corruption scandal that proved the final blow for a leader whose support has gradually eroded since he imposed unpopular measures to avert economic disaster in Spain during the eurozone’s debt crisis. Den Rest des Beitrags lesen »

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