Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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EUROPE’S HAPPY DAYS © Leo Haviland July 2, 2012

The European Council’s economic summit concluding on June 29, 2012 seemingly was a stellar success. First- and importantly given the modest (or low) expectations preceding the meetings, the rendezvous did not end in disastrous collapse. Players did not exit uttering unpleasant comments about or noisy threats toward their fellows.

Participants did not merely stress their desire to stabilize (protect) the European Monetary Union. Pacts, declarations, statements, and remarks by participants and politicians offered near-term support for the Spanish banking (sovereign debt) problem (though quite a few details remain).

Spanish banks will be recapitalized directly via the EFSF/ESM (the ESM stage assumes the ESM going into effect). Thus bailout money for this purpose will not go to the Spanish government, reducing Spain’s potential government indebtedness.

In addition, leaders made promises regarding European banking supervision. There also now are greater hopes for Europe-wide bank deposit insurance. Moreover, the extensive official statements related to budgets, fiscal union, and related matters were hopeful hymns to many enraptured audiences.

And no one can deny the sunny revival movements expressed via the sharp stock, interest rate, currency, and commodity forums following the conference.

However, a review of the lyrics in the documents issued by or directly related to this important European Council gathering shows that leaders made little progress in solving the underlying economic (fiscal, debt; structural, political) problems confronting Europe (and particularly the Eurozone). Thus widespread happiness regarding this summit probably will not persist. This money summit arguably makes more urgent appeals than prior ones. It does speak fondly of road maps, architecture, and building blocks. Talk of unified banking supervision and deposit insurance is some progress. However, as in other recent summits, fundamental problems are handled with vague language and nebulous standards. Issues of how to resolve such ambiguity thus permeate the documents. And binding mechanisms by which to effectively enforce current (and any future) fiscal standards for the various nations remain lacking.

The summit documents and related songs of confidence may buy politicians, central bankers, and other economic officials some time. However, the result is about the same as that from other recent European choruses- not much fundamental advance toward solving debt and leverage problems for Europe as a whole. It is way too soon to shout hallelujah. The persistence of the crisis (and especially further worsening of it) eventually may speed progress toward a solution. 

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Europe’s Happy Days (7-2-12)


According to conventional rhetoric, nations such as Greece, Portugal, and Ireland and their terrible sovereign debt problems are out there on the periphery. In troubling times, such concepts of distance in interest rate, currency, equity, and commodity marketplace discussions occasionally offer comfort to nervous observers. What’s relatively or supposedly unimportant nevertheless can become quite significant to a so-called or apparent center of things and allegedly core worldviews regarding it. This sometimes can happen rather fast.

Greece’s debt drama on the European periphery (and similar plays on other frontiers) highlights the acrobatic wordplay of marketplace performers. Debtors and creditors, as well as regulators and lawyers and even politicians, know the magic word “default” has ominous consequences. You can call a fiscal or other debt situation a disaster. Fine, you can label the mournful scene or event a debacle. You can swear it’s dismal, depressing, disheartening, and deplorable. But no matter what, try not to call it (and the related fix involving it) a “default”! Words such as “rollover”, “reprofiling”, and “restructuring” are satisfactory, as long as they do not cause the dreadful term “default” to spring permanently into the dialogue.

In marketplaces as elsewhere, raising the issue of the periphery suggests the merit of addressing what we take for granted and why. What is peripheral or marginal can become central (and vice versa), and so our faith in something or someone likewise can change or diminish. Or, our doubts can evolve or transform into belief. Let’s take a quick look at China and raise a couple of questions. After all, faith in the China growth story and its future near-inevitability remains widespread and deep.

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On the Periphery (The Money Jungle, Part Four)