European Central Bank

Tyler Durden's picture

Guest Post: What Has Changed In Spain?





Despite the country’s macro figures and a budget which assumes that 30% of the country’s spending next year will go to debt interest payments, how is it possible that we are suddenly being bombarded with wonderful news about Spain’s current situation – no longer at a cross roads – and colorful future? Several things have happened, we think. First, the public wants to hear nice things because they are tired of hearing the bad; so if they want good stories, they’ll get them; second, time references have changed; and finally, the divorce between the people and their representatives has consummated. The government tells its stories while the people perceive a different reality. Yet this matters little. What matters is making it through tomorrow. And if to make it through tomorrow the government has to go back on its words and say it meant differently from what it said not long ago, so be it.

 
Eugen Bohm-Bawerk's picture

On the Impotence of Karlsruhe





If there is one single event that could derail the euro experiment it is the German Federal Constitutional Court ruling on the European Stability Mechanism (ESM) and Outright Market Transactions (OMT).

 
Marc To Market's picture

The Dollar has Game





Just when the dollar's last rites were being considered, it has bounced back and looks poised to move higher in the days ahead.

 
Tyler Durden's picture

John Taylor Explains Why Economic Failure Causes Political Polarization





It is a common view that the shutdown, the debt-limit debacle and the repeated failure to enact entitlement and pro-growth tax reform reflect increased political polarization. John Taylor believes this gets the causality backward. Today's governance failures are closely connected to economic policy changes, particularly those growing out of the 2008 financial crisis. Despite a massive onslaught of legislation and regulation designed to foster prosperity, economic growth remains low and unemployment remains high. Claiming that one political party has been hijacked by extremists misses this key point, and prevents a serious discussion of the fundamental changes in economic policies in recent years, and their effects.

 
Tyler Durden's picture

Guest Post: Rediscovering The Price Of Money... When Things Can't Get Any Worse





How do we get a fundamental change away from this extend-and-pretend which prevails not only in Europe but also the world? History tells us that we only get real changes as a result of war, famine, social riots or collapsing stock markets. None of these is an issue for most of the world - at least not yet - but on the other hand we have never had less growth, worse demographics, or higher unemployment since WWII. This is a true paradox that somehow needs to be resolved, and quickly if we are to avoid wasting an entire generation of youth. Policymakers try to pretend we have achieved significant progress and stability as the result of their actions, but from a fundamental point of view that’s a mere illusion..

 
Tyler Durden's picture

Mario Draghi's Worst Monetary Zombie-Infested Nightmare Just Got Worse... In Two Charts





As frequent readers will recall, one of our favorite series of posts describing the "Walking Dead" monetary zombie-infested continent that is Europe is the one showing the abysmal state Europe's credit creation machinery, operated by none other than the Bank of Italy's, Goldman's ECB's Mario Draghi, finds itself in. As a reminder, it was as recently as September when we found that "Mario Draghi's Nightmare Gets Worse" because "European Loans Declined At Record Rate." To our complete lack of surprise, when a few hours ago the ECB released the latest monetary and credit creation update for the month of September, it showed... no change. Or rather, while loans to the private sector are at all time record lows, that other metric which Draghi at least has some direct control over (since he obviously can't control the amount of confidence in the system aside from threats of brute force), M3, just had its lowest pace of increase since January 2012.

 
Tyler Durden's picture

Troika Wants To Strip Greece Of Defense, Auto Industries, Greece Balks: The Troika-Greece Can-Kicking Toxic Loop





While the world awaits with bated breath until the moment that Greece can no longer afford to pretend it is solvent and has to apply for its third bailout from Europe, or else threaten to take down Deutsche Bank and its tens of trillions in gross derivatives, the world has to listen to the constant jawboning from the Troika which for the past nearly 4 years continues to express its displeasure with Greece, and yet still provides every Euro of funding the imploding country requests. In the latest iteration of this charade, the Troika has apparently flexed its muscles and made it clear that if Greece wants to receive the next round of cash, it will have to shutter the state-owned Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO). In short: shut down the domestic defense and auto industries, and we'll talk. Oh, and if as a result you have to import your guns and cars from Germany (whose generous funding has kept you afloat so far), and have to take out Deutsche Bank loans to pay for them, so be it.

 
Tyler Durden's picture

Frontrunning: October 21





  • FHFA Is Said to Seek at Least $6 Billion From BofA for MBS Sales (BBG)
  • Record Pact Is on the Table, But J.P. Morgan Faces Fight (WSJ)
  • Magnetar Goes Long Ohio Town While Shorting Its Tax Base (BBG)
  • Mini-Wall Street' Rises in Hamptons (WSJ)
  • Obama to call healthcare website glitches 'unacceptable' as fix sought (Reuters)
  • Starbucks Charges Higher Prices in China, State Media Says (WSJ)
  • Cruz Is Unapologetic as Republicans Criticize Shutdown (BBG)
  • Berlusconi struggles to keep party united after revolt (Reuters)
  • SAC Defections Accelerate as Cohen Approaches Settlement (BBG)
 
Tyler Durden's picture

Caxton: Goodbye To The Self-Sustaining Recovery





"It’s clear to us now that the US economy just isn't going to reach escape velocity," said Andrew Law, head of Caxton Associates (one of the hedge fund industry’s most successful money managers) in a wide-ranging and rare interview with the Financial Times. "Tapering is off the table for the foreseeable future." As we have explained numerous times, Caxton notes the Fed has little option but to continue its policy of extraordinary monetary easing indefinitely, adding "what happened [last week] was just another can kicking exercise. The problem has not been solved and the hopes for a grand bargain are in tatters." Simply put, he concludes rather dismally, "there are no incentives for the corporate world to go out and spend right now..."

 
GoldCore's picture

Gold Is A Reserve Of Safety - ECB President





But I never thought it wise to sell it, because for central banks this is a reserve of safety, it’s viewed by the country as such. In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar, so there are several reasons, risk diversification and so on.

 
Phoenix Capital Research's picture

Surprise! Europe's Banks Are STILL Totally Insolvent...





 

Remember how we were told time and again that Europe was saved? Remember how repeatedly we were told that the European Central Bank (ECB) would do “whatever it takes” to fix things? Turns out all of that was a total load of BS.

 
Tyler Durden's picture

The Rise Of The C-Note "And" The Cashless Economy?





Even as Washington stares into a fiscal abyss of its own construction, there is one bright spot: the ongoing global popularity of the $100 bill. The U.S. Treasury/Federal Reserve launched their latest version of the venerable C-Note just this week, printing $350 billion worth over the last 12 months to meet anticipated robust worldwide demand. Given that $100 bills last about 15 years in circulation, ConvergEx's Nick Colas notes that these record amounts seem to indicate very strong worldwide demand for hard currency rather just replacing old stock. In the US, by contrast, the ‘Cashless economy’ is coming hard and fast.

 
Eugen Bohm-Bawerk's picture

Seigniorage – the good old fashioned way!





The euro system has many peculiarities as we have shown extensively on our blog. To a large extent the system can be analyzed as a “tragedy of the commons” problem. As is well known in economics, when a shared resource can be exploited in full by individuals with no exclusive property right, the resource will be overexploited.

The euro is a shared resource. Every national central bank can exploit it to the fullest while the cost will be shared by every member state.

The incentive in such a system is obviously rigged to its disfavor and it will eventually break down.

 
Asia Confidential's picture

6 Key Investment Themes For The Next Decade





We identify the six investment themes that look likely to generate alpha over the coming decade.

 
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