News Links: The ECB’s back-door bail-out for Italy, Spain, Belgium, and… France?

The ECB’s back-door bail-out for Italy, Spain, Belgium, and… France? …is €489bn. Roughly €300bn of today’s eagerly awaited LTRO tender is recycled old money from earlier support operations. The new money is €200bn. This alone is not going to shore up the sovereign states of southern Europe as they grind deeper into recession/depression.

In what Vlingo CEO Dave Grannan calls a ‘good outcome’ on Twitter, the voice-to-text technology company has just been acquired by speech recognition king Nuance. Notably, Nuance has repeatedly sued Vlingo over patent infringement – and tried to acquire them – in the past

U.S. monetary policy has gone through three distinct phases since 2008. We may be about to begin the fourth.

Bank of America’s Countrywide Financial business has agreed to pay a record fine of $335m (£214m, 257m euros) to settle discrimination charges. The justice department said Countrywide had "steered" more than 10,000 minority borrowers into sub-prime mortgages, while white borrowers with similar credit profiles received prime loans.

Whatever they may claim to the contrary, the ECB is finding that it has no choice but to use the central bank balance sheet to stabilise the euro crisis. I am not complaining about that. The alternative would have been far, far worse. But we should call a spade a spade. This is quantitative easing on a significant scale, and the lines between this form of QE, and the direct monetisation of budget deficits, which is forbidden by the spirit of the eurozone treaties, are becoming increasingly blurred.

Talks over restructuring part of Greece’s massive public debt ran into trouble on Tuesday as one fund walked away from negotiations, fuelling growing doubts about whether a deal that is crucial to a new bailout agreement can be reached this year.

The risk to Germany, whose exports account for almost half of gross domestic product, is that transforming the region’s struggling nations into blueprints of itself may work too well.

England soccer captain John Terry will face criminal charges after a police probe into a complaint he racially abused Queens Park Rangers defender Anton Ferdinand during an Oct. 23 Premier League match, prosecutors said today.

First, post the 2008-09 crisis, the world economy is pregnant with multiple equilibria-self-fulfilling outcomes of pessimism or optimism, with major macroeconomic implications. Second, incomplete or partial policy measures can make things worse. Third, financial investors are schizophrenic about fiscal consolidation and growth. Fourth, perception molds reality.

I’m somewhat sympathetic to the idea that debt can drag down the economy. But there’s no need to start saying crazy things like the U.S. is about to become Italy or Greece if Obama is elected for another term. This simply isn’t in the cards.

I’m a bit more sympathetic to the ECB’s strategy than I used to be, but still not convinced it will work. Even with the threat of economic collapse at their doorsteps, European leaders still seem incapable of unified, decisive action.

Interview with Mario Draghi, President of the ECB, conducted by Lionel Barber and Ralph Atkins on 14 December 2011 in Frankfurt

What Gross fails to consider is that interest rates would be low now even if there were no Fed. This is because the economy is weak and as a result the natural interest–the interest rate consistent with economic fundamentals–is low.  As I constantly tell my students, never draw any conclusions about the stance of monetary policy by looking just at the target policy interest rate.

I think it’s extremely important that the discerning consumer understand that the problem isn’t merely that Ron Paul claims that the newsletters are a bizarre forgery, but that when initially asked about them Paul actually defended the lett

"Sustained selling by foreign investors, spurred by weak domestic economic fundamentals, is creating panic," said Deven Choksey, managing director of K.R. Choksey Shares & Securities in Mumbai. "Rupee depreciation and expanding fiscal deficit will put earnings under pressure going forward."

German companies and consumers are upbeat about the future, according to economic surveys released on Tuesday. They show that Europe’s largest economy has remained resilient in the face of the euro crisis despite expectations that the common currency zone is headed for recession.

Lo dice una nota del Wall Street Journal; hay trabas a 600 productos; iPhone, computadoras Mac, autos BMW y hasta muñecas Barbie, sobresalen en la lista

UniCredit SpA (UCG) and Intesa Sanpaolo SpA (ISP) are among Italian banks that used bonds guaranteed by Italy as collateral to obtain loans from the European Central Bank at today’s auction, two people with knowledge of the matter said. Italian banks issued about 40 billion euros ($52 billion) in state-backed bonds, the Italian exchange said in a filing yesterday. UniCredit issued 7.5 billion euros of the bonds and Intesa Sanpaolo created 12 billion euros of notes maturing in March. The bonds were to be used as collateral for the ECB auction, two people familiar with the situation said yesterday.

Barclays is out with a really interesting graph of European Cyclically Adjusted P/E (CAPE) Multiples, graph points to multiples lowest since the 1980?s:

The chains of loaned securities being pledged and re-pledged in the so-called wholesale money markets are growing shorter, as collateral piles up at central banks where it can’t generate additional borrowing.