austerity

Germany, Spain, Italy and France have met to hammer out a unified front ahead of the upcoming European summit and Spanish bailout. This is likely a fleshed out version of the G-20 plan that Barack Obama was privy to. Their answer is the 120…

The EZ rescue strategy adopted in May 2010 failed to restore debt sustainability, avoid contagion, or reduce moral hazard. This column argues that a volte face is needed. The debt of Greece, Portugal and Italy – and perhaps Ireland, Spain…

Last week, in framing the Greek elections, I reminded you that irrespective of who won the elections in Greece on Sunday, it was clear that Greece would be unable to hit their deficit targets. This is why the German government is already…

It is clear that Greece will be unable to hit their deficit targets. According to Die Zeit, Greece is already lagging on tax revenues and privatization proceeds. This is why the German government is already debating relaxing Greece’s…

In late April, I wrote a post predicting why the EU is temporarily dropping the 3% hurdle. The gist of the post was that in the euro zone and in Europe more generally, the economy was decelerating much faster than anticipated. To get ahead…

The European fiscal compact which calls for EU countries to stay within the Maastricht treaty government deficit hurdle of 3% of GDP has already been signed off on by all 27 EU governments except the United Kingdom and the Czech Republic.…

The news flow today is about the same as it has been throughout the week: JPMorgan Chase and Facebook in the US and Greece and to a lesser degree now Spain in the EU. I think these are the wrong narratives to be focused on. As I wrote…

Ray Dalio was featured in Barron's at the weekend. He spoke about the various options available to affect a private sector deleveraging. He sees three ways which he calls austerity, restructuring, and money printing. Below is an excerpt…

The talk about Greece being kicked out of the euro zone has clearly been overdone. Some have suggested that the Germans had reached their fill and that they would 'stare the Greeks down' in this high stakes game of chicken. I have…

I have written quite a few posts highlighting the statements made by Herbert Hoover during his US presidency as he struggled with the economic contraction of the Great Depression. The general tenor of Hoover's comments and actions goes to…