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Articles by Ambrose Evans-Pritchard that I found especially interesting

Ambrose Evans-Pritchard, the Telegraph's international business editor,
has followed the global financial crisis from the credit crunch to the eurozone debt crisis.
Here is a selection of news and views from his stories, blogs and columns over the past five years.
Daily Telegraph, 9 August 2012

Han är bildad, Ambrose;
Grekland, Tyskland och the London Debt Agreement of 1953
Rolf Englund blog 13/2 2012

The only issue that matters at this late stage is whether Germany is willing to let the ECB step up to its responsibility
and take all risk of sovereign default in Spain and Italy off the table, the “financial stability” clause (Article 127) of the Lisbon Treaty.
That is to say, whether Latin states are willing to mobilize their majority power on the ECB’s council to force a change in policy over German protest,
Failure to halt a full-blown debt debacle in Spain and Italy would tip the entire global system into a downward spin,
triggering the sort of feedback loop that caused such havoc in late 2008.
Ambrose Evans-Pritchard 29 July 2012

Professor Tim Congdon said the chief cause of Europe's credit crunch is the EU policy of forcing banks
to raise core Tier 1 capital ratios to 9pc too fast. "Loans are shrinking because of a misguided regulatory assault.
It is crazy to make banks shrink risk assets in a recession,"
Ambrose 26 July 2012

Europe is “sleepwalking towards disaster”
The lack of any light at the end of the tunnel is leading to a populist backlash in both the debtor and creditor states.
The only question is whether the North or the South succumb to revulsion first.
“The sense of a neverending crisis, with one domino falling after another, must be reversed.
The last domino, Spain, is days away from a liquidity crisis,” said the economists.
They include two members of Germany’s Council of Economic Experts and leading euro specialists at the London of School of Economics, all euro supporters.
Ambrose, 24 July 2012

It is time for Spain and the victim states to seize the initiative.
What they can to do is use their majority votes on the ECB's Governing Council to force a change in monetary policy.
Germany has two votes out of 23, with a hardcore of seven or eight at most.
If Germany storms out of monetary union in protest, that would be an excellent solution.
Ambrose Evans-Pritchard, 22 July 2012

"The Great Recession: Market Failure or Policy Failure?" by Robert Hetzel
A fresh US slump is not just a risk any longer. It has already begun.
Bernanke was not paying full attention because he disdains the quantity of money theory of Milton Friedman and countless others before him - including Keynes - as hocus pocus.
Yet the moneratists were right. They saw the steam engine coming straight down the tracks.
Ambrose 15 July 2012

I have no doubt that this would bring about a full recovery very fast if conducted with enough panache, but is it possible to marshal political consent for such revolutionary action?
The Tea Party Congress, like Europe's bourgeousie, would rather wallow in liquidation, Puritan cleansing, and mass default than tolerate the possibility of a solution.
Ambrose 15 July 2012

Merkel breaks German law on ESM rescue
Here is the wording of Amendment 2 to the finance law or Finanzierungsgesetz on the 26th June, the day before the Brussels summit
Ambrose Evans-Pritchard July 11th, 2012

Desperate Monti needs Merkel summit deal to stop revolt at home
Italy's technocrat government risks a parliamentary mutiny unless premier Mario Monti can secure major concessions from Germany
at a crucial summit of the eurozone's Big Four powers in Rome on Friday.
Ambrose, 21 June 2012

All through the 1930s, the European elites continued to blame the Great Depression on Wall Street excess and the crash of 1929
(a minor, if colourful, event).
They continued to do so long after Roosevelt had broken free of fixed-exchange ruin and launched a blistering recovery with monetary stimulus
They clung to this belief into the final years of the cataclysm, resolutely grinding their democracies into the dust
by enforcing debt-deflation and contraction
Ambrose, 19 June 2012

The German government has begun opening the door to shared debts for the first time in a profound change of policy,
agreeing to explore proposals for a €2.3 trillion (£1.9 trillion) stabilization fund in order to stop the eurozone’s crisis escalating out of control.
Ambrose Evans-Pritchard, 13 June 2012

“We must recognise that we have a systemic problem.
I am not sure the urgency of this is fully understood in all the capitals,”
Barroso said in a thinly veiled attack on Berlin.
Ambrose Evans-Pritchard, 13 June 2012

The world is uncomfortably close to a 1931 moment
Italy must guarantee 22pc of the bail-out funds, even though it cannot raise money itself at a sustainable rate.
You could hardly design a surer way to pull Italy into the fire.
Ambrose Evans-Pritchard, 10 Jun 2012

The Chinese issued their own verdict on Thursday.
The country's sovereign wealth fund said it will not buy any more debt in Europe until the region takes radical steps to restore credibility.
"The risk is too big, and the return too low," said Lou Jiwei, the chairman of the China Investment Corporation.
Ambrose Evans-Pritchard, 7 Jun 2012

“We’re in a situation of total emergency, the worst crisis we have ever lived through”
said ex-premier Felipe Gonzalez, the country’s elder statesman.
Ambrose Evans-Pritchard, 30 May 2012

Clearly the sugar rush from the ECB's 3-year credit blitz has worn off, leaving behind some very toxic effects.
Why anybody thought that a €1 trillion liquidity blitz through the banks is better than €1 trillion in genuine QE is beyond me.
Ambrose Evans-Pritchard, 30 May 2012, with nice chart

Capital flight has cut foreign holdings of Spanish debt from 50pc to 37pc since January.
Spain's banks -- including Bankia -- have been propping up the state with €316bn borrowed from the ECB
Now the state is propping up banks.
Ambrose Evans-Pritchard, 28 May 2012

Mario Draghi, president of the European Central Bank,
said the EU is at a "crucial moment" in its history.
"We have reached a point in which the process of European integration needs a courageous leap of political imagination in order to survive,"
Ambrose Evans-Pritchard, 24 May 2012

A tsunami of capital flight from Greece threatens to overwhelm the authorities,
forcing the country out of the euro before fresh elections in June
Ambrose Evans-Pritchard, 16 May 2012

As Greece erupts, Italy is moving into the eye of the storm.
Its economy is contracting at speeds not seen since the depths of the slump in 2009
as draconian austerity bites, greatly increasing the risk of social revolt and a banking crisis
Ambrose Evans-Pritchard, 15 May 2012

Greklands Doomsday Machine for the euro
The immediate fate of Greece - and the euro - is in the hands of a boyish motorcycle Marxist.
Greece has the "ultimate weapon". It can bring down the whole European system if EU leaders refuse to soften the terms
Ambrose Evans-Pritchard, 8 May 2012

A gut feeling in global markets that France is sliding into deep trouble,
clinging to a ruinously expensive social model in a Teutonic monetary union and a Chinese trading world.
Ambrose Evans-Pritchard, 6 May 2012

France faces 40pc house price slump
France faces a property slump of Anglo-Saxon proportions as the frothiest boom in French history finally tips over,
threatening the country with an economic shock just as austerity hits.
Ambrose Evans-Pritchard, 3 May 2012

Pro-cyclical folly
Europe faces Japan syndrome as credit demand implodes
The long-feared credit crunch has mutated instead into a collapse in DEMAND for loans.
Households and firms are comatose, or scared stiff, in a string of countries.
Ambrose Evans-Pritchard, April 25th, 2012

Brüning
Europe's political centre is starting to crumble, replicating the pattern of the early 1930s
as the crisis ground into its third year under a similar mix of fiscal and monetary contraction.
Elected governments have already been swept away - or replaced by EU technocrats without a vote, indeed to prevent a vote
- in every eurozone state where unemployment has reached double-digits: Spain (23.6pc), Greece (21pc), Portugal (15pc), Ireland (14.7pc) and Slovakia (14pc).
Ambrose Evans-Pritchard, 24 April 2012

Who is running Germany? A remakable article by a remarkable journalist
Is the Federal Chancellor in charge of the country’s foreign policy and strategic destiny, answering to the Bundestag?
Or is the Bundesbank answering to what it believes to be a higher master – the German constitution and the Basic Law – invoking the rulings of the Verfassungsgericht
Ambrose Evans-Pritchard, April 19th, 2012

Spanish and Italian banks are trapped with large losses on sovereign bonds bought with ECB funds (LTRO).
Spanish banks used ECB funds to purchase five-year Spanish bonds at yields near 3.5pc in February and 4.5pc in December.
The same bonds were trading at 4.77pc on Wednesday, implying a large loss on the capital value of the bonds.
It is much the same story for Italian banks pressured into buying Italian debt by their own government.
Any further dent to confidence in Italy and Spain over coming weeks could push losses to levels that trigger margin calls on collateral.
Ambrose Evans-Pritchard 11 April 2012

Yes, Mussolini pulled off a 20pc cut in wages in the late 1920s.
How can a democracy bring about such cuts in private sector wages without use of police coercion?
Portugal, Italy, and Spain need an "internal devaluation" of around 20pc
to claw back competitiveness within EMU. This means draconian wage cuts for year after year.
Ambrose Evans-Pritchard, 5 April 2012

If the purpose of monetary union is to tie down a "European Germany" with silken cords, the Kohl-Mitterrand legacy has gone horribly wrong.
Germany's glistening new capital on the Spree - capped by Sir Norman Foster's Reichstag dome - is the throbbing heart of a reborn First Reich, a secular and democratic variant of the Imperium Romanum Sacrum or Hohenstaufen Empire.
Ambrose Evans-Pritchard, 1 April 2012

Last month the European Central Bank exercised its droit du seigneur, exempting itself from loses on Greek bonds.
The instant effect was to concentrate more loss on other bondholders.
"It does not matter how often the EU authorities repeat that Greece is a 'one-off' case, nobody in the markets believes them."
Ambrose Evans-Pritchard, 8 March 2012

Equity long positions on NASDAQ have reached 1.5 standard deviations and long bets on oil are at an extreme of 1.9
This is occurring at a time when yields on 10-year US Treasuries are still at 1.96pc, signalling depression, deflation, or both.
Ambrose 8 March 2012

Clinging to my naive faith in the integrity of contracts, I assume that ISDA will soon trigger the credit default swaps on Greek debt.
This will happen once Athens activates its retroactive law to coerce bondholders (the Collective Action Clauses).
Here is a chart from Paulo Batori at Morgan Stanley on winners and losers. It does include the hedge funds.
Ambrose Evans-Pritchard, 7 march 2012

The unpleasant fact we must all face is that the relentless supply crunch
- call it `Peak Oil’ if you want, or `Plateau Oil’-
was briefly disguised during the Great Recession and is
already back with a vengeance before the West has fully recovered
Ambrose Evans-Pritchard, Telegraph 4 March 2012

Mr Draghi has won high praise from monetarists around the world,
convinced that he has acted just in time to head off a dangerous contraction of the money supply and a full-blown banking disaster.
"Draghi has been very astute, and has given the single currency project another lease of life,"
said Professor Tim Congdon from International Monetary Research.
Ambrose Evans-Pritchard, 29 Feb 2012

Private credit / in Spain/ spiralled out of control in part because ECB missed its inflation target every month for almost nine years and
gunned the eurozone M3 money supply at double the bank's own target rate to help Germany, then in trouble.
Ambrose Evans-Pritchard, 26 Feb 2012

Germany's ruling parties are to introduce a resolution in parliament blocking any further boost to the EU’s bail-out machinery,
vastly complicating Greece’s rescue package and risking a major clash with the International Monetary Fund.
Ambrose Evans-Pritchard, and Louise Armitstead 23 Feb 2012

German unemployment has fallen to a post-Reunification low of 5.5 pc
France’s jobless rate has crept up to a post-EMU high of 9.9 pc
The half-century habits of Franco-German condominium die hard.
It is a painful process for French elites to admit that monetary union is asphyxiating /stryper, kväver/ their economy
and must inevitably trap France in mercantilist subordination to Germany
Ambrose Evans-Pritchard, 5 Feb 2012

A disturbingly large number of credit experts warn that
the ECB life-line is not the "game-changer" that the markets seem to think,
cannot in itself can save Euroland,
and may prove counter-productive – perhaps soon
Ambrose Evans-Pritchard, 31 anuary 2012

The banks are under massive pressure to raise their core Tier 1 capital ratios to 9pc by next June.
This requires a €2.5 trillion adjustment according to the BIS’s Global Stability Board.
Most of that is going to be done by slashing loan books – deleveraging in the jargon –
since they cannot raise fresh capital at a viable cost and don’t wish to be nationalised.
Ambrose Evans-Pritchard, December 21st, 2011

Merkel's Teutonic summit enshrines Hooverism in EU treaty law
Angela Merkel’s summit has sealed a 1930s outcome for Europe,
further entrenching Germany’s misguided and contractionary policies
without offering any viable way out of the crisis at hand.
Ambrose Evans-Pritchard, 11 Dec 2011

France and Germany have bulldozed Britain out of EU for the sake of a treaty that offers absolutely
no solution to the crisis at hand, or indeed any future crisis
Europe's blithering idiots and their flim-flam treaty
Ambrose Evans-Pritchard, December 9th, 2011

No fiscal union, no Eurobonds, no ECB as lender of last resort – yet.
Just the usual blather and a revamped Stability Pact (Fiskalunion).
Private investors will not have to face further haircuts after Greece (if you believe anything they say on this subject) but that was already the case.
Ambrose Evans-Pritchard, December 5th, 2011

None of Mrs Merkel’s proposals - whether enshrined in EU treaties or not - offer any meaningful solution to the crisis at hand.
They continue to ignore the cancer in the EMU system: the corrosive 30pc currency misalignment between North and South,
and the German-Dutch trade surplus.
Ambrose Evans-Pritchard, 4 Dec 2011

Please stop defaming Germany out there in the blogosphere.
The Germans gave up the D-Mark reluctantly under French and Italian pressure, as the price for acquiescence in Reunification.
They entered EMU at an overvalued rate after the Reunification bubble, leaving them in semi-slump for half a decade.
They slowly clawed back competitiveness the hard way, by squeezing wages and driving up productivity.
Ambrose Evans-Pritchard, December 2nd, 2011
En lysande artikel

If you have half an hour, read this paper (pdf) by
Philip Whyte and Simon Tilford for the Centre for European Reform.
The deeper causes of Europe’s crisis and why the reactionary policies imposed Germany’s Wolfgang Schauble and the northern neo-Calvinists will lead to certain disaster.
Ambrose Evans-Pritchard November 21st, 2011

German finance minister Wolfgang Schauble – the most dangerous man in the world – is imposing a reactionary policy of synchronized tightening on the whole eurozone
through the EU institutions, invoking a doctrine of “expansionary fiscal contractions”
that has no record of success without offsetting monetary and exchange stimulus.
Ambrose Evans-Pritchard, DT, 20 Nov 2011

If Germany genuinely wishes to save Spain and Italy, it must allow EMU-wide reflation and
mobilize the ECB as a lender of last resort to halt the bond crisis, since the EFSF rescue fund does not exist.
To create a currency without such a backstop is criminally irresponsible.
Ambrose Evans-Pritchard, DT, 20 Nov 2011

A German veto and EU treaty constraints stop ECB intervening with overwhelming force as a genuine lender of last resort.
The bank is itself at risk of massive over-extension without an EU treasury and single sovereign entity to back it up.
This lack of a back-stop guarantor is an unforgivable failing in the institutional structure of monetary union.
Ambrose Evans-Pritchard, 6 Nov 2011

Unless the European Central Bank step in very soon and on a massive scale to shore up Italy, the game is up.
We will have a spectacular smash-up.
Italy is not fundamentally insolvent. It is only in these straits because it does not have a lender of last resort, a sovereign central bank, or a sovereign currency.
The euro structure itself has turned a solvent state into an insolvent state. It is reverse alchemy.
Ambrose Evans-Pritchard, 1 November 2011

Certain architects of EMU calculated that the single currency would itself become the catalyst for a quantum leap in integration that could not be achieved otherwise.
This was the Monnet Method of fait accompli and facts on the ground. These great manipulators of Europe’s destiny may yet succeed.
Ambrose Evans-Pritchard, 1 November 2011

As Sir John Major wrote this morning in the FT, this does not solve EMU’s fundamental problem,
which is the 30pc gap in competitiveness between North and South,
and Germany’s colossal intra-EMU trade surplus at the expense of Club Med deficit states.
Ambrose Evans-Pritchard, 27 Oct 2011

Big snag.
If Europe’s leaders do indeed leverage their €440bn bail-out fund (EFSF) to €2 trillion or €3 trillion
through some form of "first loss" insurance on Club Med bonds – as markets now seem to assume –
the consequences will be swift and brutal.
Ambrose Evans-Pritchard, October 17th, 2011

To those loudly insisting all this week that Britain should have
joined the euro ten years ago,
I can only say: are you completely mad?
Ambrose Evans-Pritchard 08 May 2008