Spanish Economy Remains on Cyclical Upswing

For all of Spain’s entrenched structural issues (as we detailed in our April thematic, Spain – Still a Hole in Europe’s Balance Sheet), leading economic data continues to point towards a cyclical recovery in Spain. Real M1 is growing at 15% YoY, consumer confidence is...

Money surges in Europe, growth to follow

If you ignore the ongoing Greek sideshow, rarely has European money growth been as accommodative as it is today. Europe has enormous structural problems of too much debt, an inflexible currency and an ageing population, but cyclical factors are very positive. Leading...

A Primer on the Euro Breakup

At the start of 2012, Variant Perception’s research team wrote a paper on the best way to break up the euro. A lot has happened since this paper was written. However, it still provides a clear, solid analysis of the problems leading up to the current situation....

Eurozone Deposits Growing Again

The ECB’s loan demand surveys (which lead by about 12 months) have been suggesting higher credit growth ahead for some time (top chart) and there are signs that this may finally be occurring.  The bottom chart shows that overall eurozone deposits rose in November,...

Target2 Imbalances Widen Again – Watch Italy

Target2 – the payment system used for intra-eurozone transfers – has widened again, with the largest two-month move since mid 2012. A look into its breakdown reveals that it is Italy that is almost completely responsible for the increase in liabilities. Ceteris...

Eurozone Growth Stuck in a Quagmire

Eurozone growth goes from setback to setback with last week’s GDP number being just the latest in a long line of similar disappointments.  Soft indicators have consistently overstated the strength of this year’s recovery, and the unpleasant truth is that as one...