[credit provider=”Ibrahim Iujaz on Flickr” url=”http://www.flickr.com/photos/notsogoodphotography/5739769957/”] With the media outlook swinging from wildly positive to wildly negative on a daily basis and rumours spiraling out of control, it can be hard to tell exactly where things stand on the eurozone crisis.But let’s be clear: the eurozone crisis is NOT going […]
[credit provider=”AP” url=”http://www.apimages.com/OneUp.aspx?st=k&kw=Evangelos%20Venizelos&showact=results&sort=creationdatelower%3Areversealphabetical&intv=None&sh=10&kwstyle=and&adte=1314047304&pagez=60&cfasstyle=AND&rids=554882c6cfc04508abc8c8be1c0c63d1&dbm=PY2011&page=1&xslt=1&mediatype=Photo”] Greek Finance Minister Evangelos Venizelos warned today that if Europe cannot save Greece, it cannot save itself, according to Bloomberg.Reuters also reports that he proposed a “euro-atlantic axis” to take steps to resolve the crisis.
Eurozone inflation situation is more stable, liquidity more important than rates ECB borrowing costs extremely cheap, inflation appears stable and not far from ECB objectives Greek insolvency shouldn’t be scenario, situation moving in the right direction Spain and Italy proposals for consolidation should be enough to get them back to fiscal […]
There’s a rumour out this morning which may be part of the rally in European markets.
The European Central Bank may be telling the world it has virtually unlimited liquidity, but except for the extremely unpalatable approach of just printing more money, this promise is not as sturdy as it seems.
[credit provider=”flickr:timsnell” url=”http://www.flickr.com/photos/timsnell/4569457286/”] According to CNBC, The ECB just changed its rules for allowing banks to use debt instruments to be used as collateral.Before, debt instruments could only be used if they were covered bonds, or approved for trading on regulated markets. Now, they’ve thrown that rule out.
There’s been a lot of confusion about Siemens fund deposit with the European Central Bank (ECB).
[credit provider=”DanielleCM via flickr” url=”http://www.flickr.com/photos/danni_m/536492895/”] According to Reuters, EU finance ministers have prepared a statement calling for European banks to raise their capital.The move would signal acknowledgment of the ineffectiveness of bank stress tests conducted by the European Central Bank in July. This couples mounting speculation that banks may indeed […]
UPDATE: A time frame for EFSF approval by eurozone parliaments is probably the biggest news coming out of this meeting. The EU officials said parliaments should all approve the July 21 agreement by early October so that funds can be dispersed by mid-October. They all stressed that this would only […]
There’s been lots of chatter about Geithner’s suggestion that the Europe should leverage the European Financial Stability Facility.
Reports are swirling that the European Central Bank and the European Financial Stability Facility could mimic TARP in order to restore confidence in the eurozone banking sector and ease the region out of the sovereign debt crisis.
A big announcement by the European Central Bank on renewed dollar liquidity measures sent markets soaring today, and pushed the euro significantly higher against the dollar.
Britain will sue the European Cental Bank to prevent it from implementing a new policy that would drive London’s financial services sector to the Continent, according to the FT.
It’s hard to be optimistic about any solution in Europe if you listen to what top European leaders are saying today. First, you have ECB boardmember Carlos Costa saying that the Eurozone was better off than the UK and the US, because external debts were lower. Sorry, but external debts […]
Morgan Stanley’s research team put out a huge strategy report on U.S. and European markets today — and it isn’t pretty.
ECB President Jean-Claude Trichet just announced that Greece most likely will receive the next round of funding from the European Central Bank, European Union, and International Monetary Fund.
Good morning. Here’s the news:1. The Taliban yesterday detonated a powerful truck bomb at a major military base in eastern Afghanistan near Kabul, killing five Afghan civilians and injuring 77 American troops. The blast was timed to coincide with the 10th anniversary of 9/11.
[credit provider=”ap”] It may be too late to save Greece from default, but Eurozone doves are excited as the European Central Bank sheds its biggest hawks.Outspoken ECB critic Nouriel Roubini sees a brighter future. He tweeted this morning: “With Weber, Stark, Trichet and Bini Smaghi all soon gone the ECB […]
[credit provider=”AP”] Jürgen Stark — who quit the European Central Bank over bond-buying this morning — told Handelsblatt that the European Monetary Union has to consolidate in order to function effectively.According to a report published in that paper this morning, Stark believes “far-reaching reform of the decision and sanction mechanisms” […]
European Central Bank President Jean-Claude Trichet launched into a mini tirade in response to a question about Germans talking about leaving the euro zone at his press conference today.
European Central Bank President Jean-Claude Trichet is giving gave a press conference today starting at 8:30 AM ET to talk about the bank’s decision to keep interest rates unchanged.
[credit provider=”flickr / jurjen_nl” url=”http://www.flickr.com/photos/jurjen_nl/5271842133/”] Update:No change in rates.
[credit provider=”horasis via Flickr” url=”http://www.flickr.com/photos/horasis/4672102342/in/set-72157624208930732/”] If you think the big speech of the day is Obama’s jobs speech at 8:00 PM ET, you’re not paying attention.First, let’s quickly explain why Obama’s speech won’t be that big of a deal: We know all the details, the Republicans have already said they […]
Nouriel Roubini tweets: “I was just interviewed on CNBC:The ECB has to reverse this week its biggest mistake ever, the rate hike that sharply worsened the EZ crisis.”
While yields on Italian bonds are certainly not out of control again (yet), bonds to bunds spreads have been marching steadily upwards since bond buying by the European Central Bank pulled them down last month.
[credit provider=”AP” url=”http://www.apimages.com/OneUp.aspx?st=k&kw=Evangelos%20Venizelos&showact=results&sort=creationdatelower%3Areversealphabetical&intv=None&sh=10&kwstyle=and&adte=1314047304&pagez=60&cfasstyle=AND&rids=554882c6cfc04508abc8c8be1c0c63d1&dbm=PY2011&page=1&xslt=1&mediatype=Photo”] Discussions between Greece and officials from the “troika” of the European Union, European Central Bank, and International Monetary Fund will pause for 10 days so that Greece can perform a technical study of its economic data.This pause follows revelations yesterday that Greece will miss its deficit-cutting and […]
[credit provider=”Associated Press”] Good morning! Here’s the news:1. Reuters reports: “The euro fell across the board on Thursday after a weaker-than-expected reading of German manufacturing highlighted increasing sluggishness in the euro zone’s largest economy.” Eurozone manufacturing activity is down virtually everywhere.
An auction of $11.2 billion in Italian bonds went off without a hitch this morning, with yields on 10-year government bonds remaining at a respectable 5.22%.
[credit provider=”Twitpic” url=”http://twitpic.com/5i0v4d”] The drama continues… or does it?It seems as though it was a crisis that sometimes people ignore, as if it has been solved somehow, while it has not.
[credit provider=”Rai.TV” url=”http://www.rai.tv/dl/RaiTV/diretta.html?cid=PublishingBlock-64203784-70f7-4b53-9d21-b14693850195&channel=Rai%201#cid=PublishingBlock-233b8482-1cbc-4970-87d5-9d7604b26ddb”] I am about to take a two week vacation (though will update the blog).I had some time off earlier in the summer, but it was dominated by the concerns of a father of a Little League baseball pitcher.
[credit provider=”Images_of_money on Flickr” url=”http://www.flickr.com/photos/[email protected]
/5858030702/sizes/l/in/photostream/”] A bank approached the European Central Bank to borrow dollars in violation of a major lending taboo, according to FT Alphaville.Banks systematically approach the ECB to temporarily borrow euros, but avoid asking for dollars unless pressed to find a reasonable borrowing rate.
[credit provider=”ECB”] From Morgan Stanley’s Joachim Fels:Economic conditions and policy legroom have switched places since 2008. Back then, economies were in very poor shape and policy legroom abundant. Since then, economic conditions have improved but policy is significantly more constrained than it was then. Despite higher thresholds to easing, the […]
Good morning. Here’s the news:
Wall Street Selector
Today everything in the market tanked. The US faced its first day as a AA+ rated nation and Europe continued to get crushed as it seemed no one was safe from investors’ debt fears. Join Nicholas Carlson, Politics editor John Ellis, and Politics reporter Zeke Miller as they discuss the […]
[credit provider=”EU”] We’re waiting on Silvio Bersluconi to speak at 1:30, while watching this bonkers market.One quick note: If indeed the ECB is coordinating with the government of Italy to trade debt monetization in exchange for reforms, that should pretty much end any notion that the ECB is independent somehow.
[credit provider=”ECB”] Fires are raging in Europe today, with stocks tanking and yields widening once again.All eyes this morning have been on the ECB due to the fact that A) it’s decision day and B) it may be the last saviour for Europe’s troubled sovereigns.
Central banks are now targeting liquidity, not just inflation. The credit boom of the past decade highlighted the inadequacy of focusing only on prices, and underscored the need for the monetary authority of a country (or group of countries in the case of the European Central Bank and the eurozone) […]
[credit provider=”EU”] Jean-Claude Trichet is giving his post rate decision press conference.He has NOT said the words “strong vigilance” which would have meant an imminent rate hike.
[credit provider=”World Economic Forum at Flickr” url=”http://www.flickr.com/photos/worldeconomicforum/2297234392/”] Update: Exactly as expected, a 25 basis point hike.Again, the real news will come in 45 minutes when Trichet speaks.
[credit provider=”AP” url=”AP”] UPDATE 9:12 AM: We have official language to back up the earlier Reuters report. An extension, rather than a new opening.From The ECB:
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Draghi,_Mario_%28IMF_2009%29.jpg”] The last few days have been very significant and will likely shape investors views in the weeks ahead. While Greece remains at the epicentre of the European debt crisis, the issue is much bigger. It has begun bleeding over not just into Ireland and Portugal, but […]
If Greece defaults on its sovereign debt, the effects will be global. Everyone from Japanese savers to U.S. retirees is likely to feel the effects. Let’s run through the dominos that could fall after a Greek default.
T he world is beginning to look a lot like the August of 1914 or perhaps the summer of 1939 all over again. This time instead of the great powers of central Europe dragging the rest of us into a European affair, it seems that nearly every corner of the […]
The feud between ECB president Jean-Claude Trichet and German finance Minister Wolfgang Schaeuble escalated in a major way today with members of German Parliament siding with Schaeuble and against the wishes of the ECB. German Politicians Demand Private Creditors Participate Please consider Germany MPs discuss resolution on Greece aid
Highlights U.S. government interventions in the economy, initially aimed at arresting financial free-fall, and swiftly followed by additional measures targeted at spurring an economic recovery, have been quite successful with regard to the former goal. But such policies have been notably unsuccessful at restarting activity that can be described as […]
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:About_to_dive_off_a_dock.jpg”] The global economy has become so incredibly unstable at this point that it is not going to take much to plunge the world into a horrific economic nightmare. The foundations of the world economic system are so decayed and so corrupted that even a stiff breeze […]
“Strong Vigilance,” suggests we will see a rate hike in July, number 2 in this tightening cycle.
[credit provider=”World Economic Forum at Flickr” url=”http://www.flickr.com/photos/worldeconomicforum/2297234392/”] Greece needs to force a 7-year extension on its bondholders if it is to recieve more bailout cash from European powers, says German finance minister Wolfgang Schäuble.Schäuble has outlined in a letter that the German government wants this extension as part of a […]
[credit provider=”AP”] Core inflation is not a good indicator of where headline inflation is going and, therefore, it should be ignored when making monetary policy decisions, according to the ECB’s Lorenzo Bini Smaghi.Smaghi, writing in The Financial Times, argues that excluding food and energy costs may make the index less […]
This morning’s surprising miss in the European inflation number suggests the ECB won’t need to tighten anytime soon, something president Jean-Claude Trichet hinted at last week.
The ECB is an “enormous bad bank” that holds securities which expose it to downside scenarios across the eurozone, according to Der Spiegel.
Greek debt will not be reprofiled because the threats of the ECB are too grave and the stance of Europe’s political leadership too muddled, according to Wolfgang Münchau at the Financial Times.
The words for today are the same as the words for last week and last month: defy and denial. Let’s consider a few examples. Campers in Spain Defy Protest Ban The New York Times reports Tens of Thousands in Spain Defy Protest Ban
[credit provider=”NASA via Wikimedia Commons”] Money Game editor Gregory White joins Radio BI today to give us the low down on what’s going on in Europe.”Things are getting bad again [in Europe], and I think it’s definitely imploding.”
The reason why European leaders will not accept a haircut on Greek debt is because the European Central Bank has exposures worth €100 billion ($144 billion) tot he country, according to Wolfgang Münchau.
Nouriel Roubini has blasted the European Central Bank’s recent rate hike, citing the weakness of the eurozone’s fringe, according to the BBC.
German Chancellor Angela Merkel is trying to stop Italian central banker Mario Draghi from becoming the next ECB president, according to Der Spiegel.
The euro’s morning dive has continued this afternoon, with the currency sliding further against the dollar.
Trichet has not signaled a rate hike in June. He has called on banks who have limited ability to fund themselves through markets to take advantage of government support.
While this morning’s policy announcement was a snooze, but at 8:30 AM ET Jean-Claude Trichet will be speaking to the press about the ECB’s latest policy decision. He could signal a rate hike there, and the only two words you need to watch for are Strong Vigilance.
Headline: ECB keeps rates unchanged, at 1.25%
Tomorrow, the ECB will announce whether or not it intends to hike rates again in the month of May, after doing so in April.
Early estimates for April eurozone inflation came out ahead of expectations, with the region’s CPI rising to 2.8%, according to Eurostat.
[credit provider=”AP”] The latest 2:35 PM: German Chancellor Angela Merkel may have just approved Draghi as her candidate to replace Jean-Claude Trichet as the president of the ECB, according to German tabloid Bild (via forexlive).Whether she got any concessions of the deal is unknown. We’ll let you know if we […]
ECB President Jean-Claude Trichet is in hot pursuit of any datapoint that suggests it’s time to hike rates again, and he may have just got it.
[credit provider=”AP”] Former Goldman Sachs Vice President and current Bank of Italy governor Mario Draghi now has the backing of French President Nicolas Sarkozy in his quest to become the next President of the ECB.While he now seems the likely successor to Jean-Claude Trichet at the ECB, there are a […]
The world’s central bankers have been tricked by a period of exported deflation to believe that it is easy to hit inflation targets, according to Societe Generale’s Brian Hilliard.
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Draghi,_Mario_%28IMF_2009%29.jpg”] German politicians are closing to agreeing on Italian Mario Draghi to be the next ECB chief.Draghi has the support of the junior coalition party in Chancellor Angela Merkel’s government, but has not yet received the vocal support of Merkel herself, according to Bloomberg.
Yesterday’s amazing election in Finland is over. The business of forming a new government now begins.
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:2006_1031turturduva0224.JPG”] Michael Bonello, governor of the central bank of Malta, spoke out this morning against another potential rate hike in the eurozone, suggesting it could be a threat to the region’s banking system.Bonello said in a speech this morning (via Bloomberg):
Eurozone inflation for the month of March surged to 2.7%, year-over-year, from 2.4% year-over-year in February, according to Eurostat. That’s higher than the original 2.6% reading. In the euro area, on Ireland remains below the 2.0% target rate set by the ECB, at 1.2% year-over-year inflation.
[credit provider=”AP”] The IMF has targeted the European Central Bank’s decision to raise rates in its latest World Economic Outlook, suggesting its leaders should show more patience in the tightening process.The IMF cites low core inflation expectations, the likelihood of a decline in commodity prices in the short-term, and excess […]
George Soros spoke to Bloomberg Television from Bretton Woods yesterday on a variety of topics including his opposition to the recent ECB rate hike. He also discussed the current situation in China and his worries over inflation and the banking system there.
[credit provider=”World Economic Forum via Flickr” url=”http://www.flickr.com/photos/[email protected]
/4309799402″] George Soros has come out against Jean-Claude Trichet, the ECB, and its recent rate hike, according to an interview with Bloomberg TV.”It is not appropriate in current circumstances when you have a number of countries that are suffering from too much debt and […]
Deutsche Bank chief economist Thomas Mayer has called on the ECB to hike rates again in an editorial in the Financial Times.
The headline: Don’t expect a rate hike next month, though another sharp spike in energy prices due to Middle East instability could trigger such a move. This is not the first in a series of hikes, according to Trichet.
Headline: The ECB has increased interest rates by 0.25%, to 1.25%.
July 3, 2008. The economy was showing some signs of creaking, but oil was surging, so the ECB felt like it had to do something.
What, you don’t follow Nick Leeson, the infamous “rogue trader” on Twitter? Get on that.
Get ready. Something big might happen today. A major world central bank might actually hike interest rates.
The ECB is expected to hike rates at its policy meeting tomorrow, and while the immediate result will be a tightening of the money supply within the eurozone, a key trickle on effect will be more damaging to the region’s weakened economies than others, according to Societe Generale’s Michel Martinez.
The eurozone’s February PMI came in slightly hotter than expected this morning, increasing 0.8% month-over-month, according to eurostat. But the January PPI number that once seemed so hot has now been revised down from 1.5% to 1.3% month-over-month.
Eurozone inflation for the month of March solidly beat expectations, rising 2.6% year-over-year, according to the latest release from Eurostat.
[credit provider=”Wikimedia Commons” url=”http://en.wikipedia.org/wiki/File:JuergenStark01.jpg”] ECB chief Jürgen Stark has denied the bank is ignoring the problems of the region’s weakest states in an editorial in the FT.His comments are in direct opposition to those who believe the ECB should be keeping rates low to protect the eurozone countries still struggling […]
[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Dublin_riots_traffic_cone.jpg”] The ECB is prepared for next Thursday’s Irish banking stress tests to go terribly, and has set aside more than €60 billion ($84 billion) in support, according to The Irish Times.The plan would supply “medium term” capital to Irish banks, essentially liquidity support, so they can […]
Scott Sumner wrote If pressed, Keynesians will usually point to real interest rates as the right measure of monetary ease or tightness. By that criterion the Fed adopted an ultra-tight monetary policy in late 2008. Monetarists will usually say that M2 is the best criteria for the stance of monetary […]
[credit provider=”AP”] The latest name to be mentioned as a potential success for for ECB president Jean-Claude Trichet is that of Luxembourg’s central bank chief Yves Mersch.Since Germany’s Axel Weber dropped out of the running, there’s been no clear front runner, though Italian Mario Draghi has been heavily talked about.
The primary reason for the currency’s stabilisation earlier this year and the subsequent 10% rally from early Jan was the ECB’s hawkish rhetoric in the face of rising inflation.
As if you didn’t have enough to worry about, tomorrow brings a meeting in Brussels of the leaders of the European Union. They’ll be gathering to discuss Angela Merkel’s grand bargain: succinctly described by The Economist magazine as follows: “in exchange for boosting the euro’s defences, she wants tighter economic […]
Good Morning! Here’s what you need to know right now.
When the Harris Interactive poll of a hypothetical French presidential “primary” election was published, the reaction among insiders was: the books were cooked.
Jean Claude Trichet hinted last week that an ECB rate hike could be imminent.
[credit provider=”AP”] With the euro summit in just four days, German Chancellor Merkel is facing domestic opposition to euro-saving policy that could divide her coalition government.Her coalition, made up of centre right and other right groups, recently passed a resolution that says no to the stable eurozone states’ money being […]
The ECB’s hawkish tone and intention to raise rates is a move out of line with Federal Reserve Chairmen Ben Bernanke’s famous economy paper Systematic Monetary Policy and the Effects of Oil Price Shocks, according to Ambrose Evans-Pritchard.
[credit provider=”Ibiblio.org”] Clyde Prestowitz is a thoughtful observer of the global economy. Fans of his work can now keep up with his thinking at his new blog at Foreign Policy. Here’s an excerpt from his first post:At present, virtually all the world’s economies are attempting to grow and create jobs […]