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, [...]
The global dollar situation continues to get muddied by divergent and apparently unrelated factors of significant scale. The Chinese are still not buying UST with nearly the same vigor that was very evident prior to the dollar travails last year (which I still believe is dollar liquidity rather than PBOC intent), while Japan and Belgium have suddenly found themselves infatuated [...]
Mario Draghi was out yesterday with comments about the recent strength of the Euro (via the WSJ): WASHINGTON—European Central Bank President Mario Draghi on Saturday ratcheted up his warnings about the strong euro, saying a further rise in the exchange rate would trigger additional monetary easing to keep inflation from falling too low. "A strengthening of the exchange rate requires further monetary [...]
The Markit Manufacturing PMI for the Eurozone hit a 24-month high just above the magical 50 line. While the Services PMI fell just short of 50, it was at 49.6, a level not seen in 18 months. These snapshots of economic function have provided a spike of optimism against the dismal European depression that has been unshakable. There should be [...]
With everything going on in Japan and the US credit markets, Europe has slipped somewhat from the headlines. Part of that is now universal recognition of the durable depression facing the entire continent, no more denials about containment or rapid rebounds. But politicians and policymakers have still maintained that the currency portion of the crisis is over, and that the [...]
Gold prices seem to have settled in around the $1,400 range recently. Whether or not that price is a psychological attractor for both buyers and sellers, there does seem to be some degree of market stability around that level currently. While it is impossible to say how long this illusion of stability will last, there seems to be a confluence [...]
Gold has not behaved like money in decades, rather gold is, for the most of the world, an investment class. We may not like such a development (it is one of the most insidious actions intentionally undertaken by central banks, including Basel rules) but gold is a liability on a bank’s balance sheet complete with a greater-than-zero risk-weighting. That means [...]
Getting into the arcane accounting of central banks is a chore, but, in an uncertain world with every central bank “doing something” at exactly the same time, it is a vital task that requires patience. A lot of patience. Central banks all have familiar financial disclosures and statements. The Fed, ECB, SNB, Bank of England, Bank of Japan, et al, [...]
Could tiny Cyprus with a population of less than 1 million be the undoing of the Euro experiment? It seems surreal to think that such a tiny country, representing less than a quarter percent of Euro GDP could be the trigger for the unraveling of an entire continent's currency but it is often small countries that reveal big problems. Thailand [...]
“According to ABI the value of total loans issued, 1.467 billion euros, represented a 2.5% drop on the December value and was largely the result of the continuing recession in Italy. “Meanwhile, for the current year ABI researchers said their forecasts of a 0.6% contraction in the economy would likely be revised for the worse after a higher than expected [...]
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