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Economy in Brief
U.S. Factory Sector Orders Ease
New orders in the manufacturing sector increased 1.8% during June (-6.2% y/y) following a 1.1% May decline...
EMU PPI Drops But It Also Decelerates
The PPI headline in June fell by 0.2%...
U.S. ISM Factory Index Unexpectedly Falls To Three-Month Low
The ISM Composite Index fell to 52.7 during July following unrevised gains to 53.5 and 52.8 during the prior two months...
U.S. Light Vehicle Sales Rebound
Total sales of light vehicles increased 3.3% during July to 17.55 million units (SAAR, 6.2% y/y), recovering most of June's decline from the cycle high...
U.S. Personal Spending Rise Moderates Despite Firmer Income Gain
Personal consumption expenditures increased 0.2% during June following 0.7% and 0.3% gains during May and April...
U.S. Construction Spending Trend Is Strong
The value of construction put-in-place ticked 0.1% higher during June (12.3% y/y) following gains of 1.8% and 3.8% during the prior two months...
by Louise Curley June 4, 2012
Spain is in trouble once again. Capital is leaving the country and interest rates are rising, as can be seen in the attached chart. The 10 year bond rate was 6.5% on June 1st and probably higher today. The European Central Bank, the European Commission and the International Monetary Fund together with the Spanish government are engaged in trying to find ways to ameliorate the situation while the foreign banks that have lent to Spanish banks in the past are worried about their exposure to these banks.
Some Information on foreign banks' exposure to Spanish banks, as well as to Greece, Ireland and Portugal, can be found in Haver. In The Bank of International Settlements (BIS) data base, there is a table "Foreign Exposure to Greece, Ireland, Portugal and Spain" under the section, Consolidated International Claims on BIS Reporting Banks. Data are quarterly and begin in 2010. Most data end in the fourth quarter of 2011. Countries covered are Germany, France, Italy, Other Euro Area, Japan. U. S. U. K. and Rest of the World. U. S. banks appear to have the largest exposure, $227.7 billion dollars, to Spanish banks followed by Germany and other European Countries. Japanese and Rest of the World banks have much smaller exposures to troubles in the Spanish Banks.
|Exposure of Banks to Claims from Greece, Ireland, Portugal and Spain, Q4 2011 (Billions USD)|
|U. K. Banks||137.5||33.3||192.1||22.3|
|Other Euro Area*||179.6||21.9||67.2||33.5|
|Rest of World Banks*||41.3||5.7||57.3||9.5|
|* Data are as of Third Quarter, 2010|