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Slice of MIT
Baseline Scenario
Jun
24th
Thu
24th
The euro may fall as much as 28 percent if France fails to repay investors, while a default by the Spanish government would trigger a 20 percent currency devaluation, Italy a 17 percent drop and Germany a 25 percent decline, according to Citigroup.
May
24th
Mon
24th
May
18th
Tue
18th
WAGES IN THE PERIPHERY NEED TO FALL 20-30 PERCENT RELATIVE TO GERMANY.
Mar
17th
Wed
17th
Could it be that Mr Schauble might actually want to convince the Greeks and other potential malefactors that the cost of staying in the euro-area is prohibitive? For chucked in amongst the ritual assurances that “there is no alternative to monetary union”, the German finance minister actually raises an alternative - weak countries should be forced out of the euro. He writes - “Should a eurozone member ultimately find itself unable to consolidate its budgets or restore its competiveness, the country should, as a last resort, exit the monetary union.” Not could, you note. Should.
— Great commentary to extremist proposal by German finance minister Wolfgang Schauble via Wolfgang Schauble’s torture chamber | Gideon Rachman’s Blog | FT.com
Jan
10th
Sun
10th
if exit strategies proceed as planned, all U.S. and U.K. asset markets may suffer from the absence of the near $2 trillion of government checks written in 2009. It seems no coincidence that stocks, high yield bonds, and other risk assets have thrived since early March, just as this “juice” was being squeezed into financial markets. If so, then most “carry” trades in credit, duration, and currency space may be at risk in the first half of 2010 as the markets readjust to the absence of their “sugar daddy.
