The Euro monetary system is flawed. It is a system that was cobbled together for political purposes; and sadly it was set up in such a way that each member state retained significant sovereign powers - most importantly the ability to exit the system and default on...
I have been in Asia since Monday morning. And I have had many individual meetings and a few group lunches/dinners across Hong Kong and Beijing. While this is at least my 15th trip to Beijing since my first in 1997, it only gets more amazing each time. There are a...
As a follow up to my short note on Friday - "The single most important decision in the history of EMU" - I want to look at the contagion, fallout and global central bank policy responses in the event that the Greeks are shut out of Target2 and thus forced to exit EMU....
Eurosystem claims directly on the Greek banking system are some 130b Euros (open market operation repos, LTROs and ELA lending). These claims are backed by a variety of highly suspect Greek collateral that is all held in custody at the BoG. For ELA borrowing (about...
The German election results in Baden Wurttemberg, the Der Speigel turnaround, and the increasingly supportive comments from nearly every European official on a Greek exit have markets on edge. People are throwing around numbers like 500b in realized losses if (when)...
So this past week the French and the Greeks have made strong political moves towards the anti-austerity left. The Germans have rejected the center right in local elections. And the anti-austerity movement has won the day in Italian regional elections. As discussed in...
Spoos are up 20+ pts from the Sunday evening lows, and they are now above Friday’s close. The Euro is still down from Friday, but Estoxx are zooming - up 40pts from Friday and up nearly 80pts from the morning open. Markets seem to be embracing a renewed optimism for...
Bon Soir!! Kalispera!! Welcome to "The New European Republic" - otherwise known as Den Europeiska Republiken. Forget about the goal of moving towards a "United States of Europe", we are now heading down a decidedly "Swedish" path on the European continent. The move to...
It was a soggy payroll report but certainly not a calamity. With revisions we were actually near the recently lowered expectations. The flat AHE certainly isn't a plus and the further drop in the labor force will get the "structural unemployment" camp hot and...
From Ben's Q&A today on the possibility of more QE – "We have been very accommodative. And we remain prepared to do more as needed to make sure this recovery continues and that inflation stays close to target......so those tools remain very much on the table. We will...
From Ben's Q&A today on the possibility of more QE – "We have been very accommodative. And we remain prepared to do more as needed to make sure this recovery continues and that inflation stays close to target......so those tools remain very much on the table. We will not hesitate to use them, should the […]
