ecb

Rocky Days Ahead

By |2014-08-15T17:01:46-04:00August 15th, 2014|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is little for me to say about the GDP figures from Europe, released this week to much shock and discomfort, as I am frankly tired of GDP and eagerly await the unhonored end of its continued mainstream “significance.” The largest problem with it is that its correlation with actual economic results has clearly broken down from whatever it had [...]

Welcome Back; We Hardly Missed ‘Ya

By |2014-08-07T10:38:55-04:00August 7th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

It may have been something like two years, maybe closer to eighteen months, but it seems just like yesterday that Europe had left its deficient construct in the past. It was a daily ritual back then, exercising due diligence often through nothing more than checking just how negative bond rates would spring. There were German bunds and even indications of [...]

The Euro Gone Dead Too

By |2014-07-23T11:34:57-04:00July 23rd, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

With the introduction of the world’s first major negative interest rate, I believe it was fully expected that the euro would devalue. After all, it sounds very much like an act of debasement, intentional and heavy, that should move the currency “markets”, but that has not been the case. In fact, the euro appears as much captured by confused stasis [...]

Resiliency Line Challenged Again

By |2014-07-10T11:42:18-04:00July 10th, 2014|Markets|

There is no doubt that the investment world, particularly bubble sectors of finance, need reminding how paper thin the layer of ease and order actually is. The calm created by central banks, and this applies to every jurisdiction with the possible exception of Switzerland (which took its very bad medicine in 2008), is only that. There has been nothing fixed, [...]

Eonia Not Looking Like Lending

By |2014-07-08T15:55:30-04:00July 8th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The ECB continues to sell the recovery in Europe despite any actual pickup in activity, Germany excepted. In financial terms, which are all that matter these days for policymakers, lending continues to contract. Despite the outward appearance of asset prices and certain economic accounts, there is no intent to extend further credit across the European zone. The latest figures through [...]

There Is Surprising Depth to The Semantics of ‘Traction’

By |2014-06-10T15:27:36-04:00June 10th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I don’t want to devolve into a Clintonian argument over the basic meanings of certain words, but that may be the best course in analyzing and discussing Europe’s circumstances in the very new age of negative interest rates. Reuters says there is “clear proof” that Draghi’s desperation and new bluff is “gaining traction.” An all-time low for euro zone money [...]

I Shall Return

By |2014-06-08T14:10:46-04:00June 8th, 2014|Economy, Federal Reserve/Monetary Policy|

The ECB and Mario Draghi made some fairly dramatic moves in European monetary policy last week. They weren't entirely unexpected but the market response indicates some disappointment that they didn't do the full monty and initiate outright QE. Draghi has spoken recently about his desire to see a lower Euro and the last couple of weeks things have been going [...]

The Revelation of ‘Targeted’

By |2014-06-05T09:51:01-04:00June 5th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The only surprise, inasmuch as it was the most unspecified ahead of time, from this morning’s ECB announcement was the terms of the new “targeted” LTRO’s. According to the press conference, the terms will allow European banks to borrow from the ECB up to 7% of the total amount of each bank’s loans to the European nonfinancial private sector, with [...]

Draghi Hiding A Small Course of Abenomics?

By |2014-06-04T15:24:15-04:00June 4th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The ECB is widely expected to cut rates again tomorrow, and may include a program to “encourage” securitization of loans to small and medium businesses (SME). For now, the idea is to reduce the “drag” on Europe’s purported recovery, as, once again, the central banking regime turns to debt as the one and only solution. As I noted last week, [...]

Simplicity; European Finance

By |2014-05-28T16:23:22-04:00May 28th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It was just over a year ago that the ECB began courting rumors about an ABS addition to its monetary toolkit. With the obvious lack of credit flowing in the real economy flying directly in the face of all monetary convention and expectations, you can understand the desire to dust off the idea. Just over a week before the ECB’s [...]

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