Global Macro

Please find below the full World Economic Forum’s (WEF) 2012 Global Risks Report along with the summary discussion video.

In March last year, while giving a re-cap of my concerns about the European financial situation, I stated: National governments kept issuing bonds to cover the ever growing debt while the backing of the ECB was giving the false impression to foreign investors that Greece was as safe a Germany.

More good data out of Germany overnight with German exports rising 2.5% in November after posting their biggest fall in half a year the previous month.

This week in Europe begins with yet another Merkozy meeting German Chancellor Angela Merkel hosts French President Nicolas Sarkozy Monday, kicking off a week of high-level talks to lay the groundwork for a crunch EU summit on taming the eurozone crisis.

Another interesting night in Europe.

As I explained yesterday the data I am watching this week is the ECB’s marginal lending and deposit facility usage to get an idea if the interbank stress in the Euro-Zone is lowering as the new year ends.

Another decent night on European equities as German employment and the world-wide manufacturing data gives some hope that 2012 will be a year of economic recovery and the world is moving beyond the stagnation of 2011.

Welcome to 2012 and thanks to the Prince for his great efforts over the Christmas-New Year period, I certainly enjoyed the down time….

Today’s chart is a monthly price chart of the Euro currency since it was adopted for circulation (after conversion from the former sovereign currencies) against the other monolithic currency, the US dollar.

The ECB cash for collateral swap, as part of the LTRO and totalling some €209.9bn, would have occurred some time in the last 24 hours.

                    Find below the transcript of a recent and long interview between ECB President Mario Draghi and the Financial Times reporters, Lionel Barber and Ralph Atkins: _______________________________________________________ Financial Times: We are now more than four years into the financial crisis.

So it seems Santa could only last one night.

An interesting interview of John Taylor, CEO of FX Concepts, on Bloomberg, where he makes the call for a European recession, highlighting that Germany should be helping out more trying to weaken the Euro.

Well it looks like Santa finally stuck his head out of the dark cave for a look around.

A bit more from last night’s European Fin-Min teleconference: European Union finance ministers failed to agree Monday to raise the ceiling of funds that can be held at any given time by the euro area’s transitional and permanent rescue funds, an EU official said Monday.

One of the great things about being involved in the creation of MacroBusiness is that we appear to have managed to build a platform where well educated people from all walks of life can share their knowledge of the economics and political economics.

The big news out of Europe over the weekend was the downgrading of Belgium by Moody’s (h/t a63 who called it): Belgium’s credit rating was cut two steps by Moody’s Investors Service, which said rising borrowing costs, slowing growth and liabilities from Dexia SA’s breakup (DEXB) threaten to inflate the euro area’s fifth-highest debt load.

Much of being made of the profligacy of southern European countries, their unsustainable levels of debt.

Yet another interesting night in Europe.

Please find below former Reserve Bank of New Zealand advisor and multiple CEO, Terry “Macca” McFadgen’s, predictions for the year ahead.

Let’s not break out the champagne but there was a bit of relief of the second derivative variety for global PMIs last night with the rate of decline for most slowing in December. Let’s begin with the core of the problem, Europe: The Flash Eurozone PMI Composite Output Index was at 47.9 (47.0 in November).

I posted back in July that I thought France would be next after Italy in the contagion breakdown because of its macroeconomic metrics.

Ric Battellino just gave a speech to the at the 24th Australasian Finance & Banking Conference on the topic of European financial developments.

For some time now I have been pointing out poor economic policy implementations within the European economy and how those policies are likely to effect the real economies of European nations.