At his last news conference on June 3, ECB chief Mario Draghi issued his list of successes so far with QE in Europe. The program was only announced four and a half months ago, being operational only for two, but he was positive that it was already having its intended effects. "Our monetary policy measures have contributed to a broad-based [...]
Even factoring different sources, there is a decided bi-polar nature to views on Europe’s “recovery.” The slightest deviation from the straight, upward extrapolations of economists is cause for serious self-reflection of Europe internally. That should not be so unexpected, particularly given how economists have completely missed everything since 2007 (anyone remember de-coupling?). But with the ECB’s new QE, there is [...]
So far Europe’s QE is having some trouble gaining pace. As of March 13, the ECB reports that €9.7 under the Public Sector Purchase Program has been carried out, or about half the rate that was anticipated. That may come as a shock to those not familiar with the ECB’s heightened action of the past eight months, but it is [...]
The issue of bank hoarding has become nearly mainstream as the size of the move into UST is now too large to ignore. It wasn’t so much an issue last year, apparently, as there was less to suggest taking very pessimistic portfolio allocations was anything other than an anomaly of regulation. This year the idea of prudence as opposed to [...]
For the first time in thirty-five months, overall lending in Europe was higher year-over-year. Not since January 2012 had that been the case, as shrinking in lending was a de facto monetary limit on where the ECB wants the European economy to go. And while one month is not necessarily the start of a durable trend, indications had been for [...]
The “inflation” results out of Europe this morning highlight and emphasize the disingenuousness at the heart of monetary economics. While some of the “peripheral” nations (as if they are less European) are deeply into “negative inflation”, Germany (as if it is more European) has been an almost singular source of what the ECB views as a standard. However, even Germany [...]
I’m not sure how much this can pass for shared wisdom, but somehow central bankers have become concerned about central bankers. This situation has been described and discussed ad nauseam since Japan first went full ZIRP in 1999. For all that supposed self-reflection, nothing has really changed except the rhetoric – and only recently. “This is a world which places [...]
The reason I have been characterizing the ECB’s actions since this summer as “desperate” is entirely due to the fact they are simply redoing things and expecting everyone to simply assume they are acting anew. That may not be entirely the case with their obsession with Eonia (more on that below), but narrowing the corridor has been the active policy [...]
There are “portfolio effects” for individual investors, bank balance sheets and even interbank tendencies, or at least that is according to central bankers. The rather tame ECB announcement this week did highlight and clarify what Mario Draghi and his euro monetarists wish to accomplish. The new measures will support specific market segments that play a key role in the financing [...]
What should most troubling to investors of all stripes and locales is that what is going on in Europe is almost exactly the same as what is taking place in Japan. Despite nearly all outward appearances, Japan and Europe have far more in common than differences, at least where it counts. The Japanese have finally created the monster they sought, [...]
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