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Commentary
The Politics of Austerity
I hate to sound like a broken record here, but I believe the anti-austerians have it all wrong about the politics of austerity. Everywhere I look, there is some analysis that takes the statements of policy makers and big investors as…
Why austerity in Europe will continue
The reality of course, is that euro zone governments do have to worry about losing market favour. They cannot rely on the central bank as a debt buyer of last resort the way the Japanese, the British or the Americans can. If, for whatever…
Some thoughts on the Fed’s QE stance
A week ago I wrote that I believed QE will end this year after tapering off in June. I stand by this stance. However, we have heard from three Fed officials in the interim and I wanted to pass on what they are saying to gauge how likely it…
Merkel: Germany ‘too weak to withstand more stimulus’
I have been saying for some time now that Germany is concerned about its own public finances. So it is good to see that Angela Merkel is now confirming this. According to the Telegraph, Merkel believes that Germany simply doesn't have the…
Why Germans are poor
Recently the ECB conducted a eurosystem household finance and consumption survey and man have been talking about it because it shows that household wealth in places like Italy and Spain is greater than it is in Germany. The question I think…
QE will end this year after tapering off in June
I was on BNN's Headline with Howard Green yesterday talking about the Fed's QE program. I said that QE would be tapered and I believe it will likely end at the end of this year if the economy does not slip into recession. This is the…
The Economy in the United States and the United Kingdom
Quick note here on the US and the UK to change things up a bit from the Cyprus obsession.
On why the ECB is cutting off Cyprus on Monday
The latest information on Cyprus is that the ECB has told the Cypriots it could no longer extend the ELA facility being used by the now bankrupt Cypriot financial institutions. Cyprus has until Monday to find the funds to support their…
On Cyprus and the European Crisis
It has been non-stop Cyprus for the past couple of days this weekend. And it has brought back the bad ol' days when every weekend seemed to be another episode in endless crisis. To wit, this episode in Cyprus demonstrates how misplaced the…
Europe gives Portugal ‘time to adjust’ and lets fiscal targets slip
It is not at all clear where things in Portugal are headed. The economy is in a deep depression. Yet, sovereign bond yields have come down. The Troika is even relaxing Portugal's austerity target, hoping this will drive yields down further.…