Deposit Leak in Southern Europe as Money Heads for Germany; Stress Indicators from Saxo Bank

Steen Jakobsen, chief economist at Saxo Bank in Denmark has some interesting "stress" charts in this week's email.

click on any chart for sharper image

European Demand Deposits



Steen writes: "Europe’s depositors – mainly the weak Club Med states (Greece+ Portugal) continue to take money out of the country – even increasing the speed with which they do it."

Steen sarcastically added "Sure Mr. Draghi, the ECB has been a great success. The shown data is only including January as IMF data is as slow as their willingness to accept changes. Imagine when March and April data is in."

Recall that Draghi said there was no rush to exit following Cyprus. We will see soon enough.

France Germany 10 Year Bond Spread



Steen writes "The 10 Year spread between France and Germany have totally lost value. The ECB and French government is forcing domestic players in France to buy government bonds due to regulation and pro-government incentive structures."

"France and Netherlands are two economically challenged countries in the core of Europe which continues to perform dirigisme instead of attending to reforms."

Dirigisme means economic planning and control by the state. Steen does not believe central planning  works and neither do I.

Copper



Steen writes: "I added Copper to my list of stress indicators (the first future). Copper is said to have a Phd in Economics as its normally leads the direction of the growth."

Slovenia, the Next Big Thing



Steen writes "I have changed Denmark 5 YR CDS for Slovenia in order to monitor its rise to the next big thing in Euro debt crisis. Today the CDS spread fell due to good bond auction."

Previously Steen had been comparing France to Denmark.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com