bailout

We’ve reached a very rare moment in economic history where the problem is greater than the ability of the politicians to respond.

Market confidence continues to improve amid hopes that euro zone policy makers take bold actions. Slovenia begins vote on EFSF ratification; sharp shifts in positioning may prompt mean reversion. Hong Kong’s trade figures showed a softening…

Germany’s ability and willingness to pay will decrease as the economy falters. Remember, Germany is more indebted than Spain and has also long been in violation the Maastricht Treaty’s stability and growth pact provision on government debt…

Countries like Slovenia have their own problems. As the euro zone economy worsens, their willingness to support bailouts decreases. And the European institutional principle of unanimity will almost certainly mean that bailout fatigue leads…

I want to highlight three things here from Wolfgang Munchau on the euro zone because he reaches conclusions I have reached. Below are excerpts of what Munchau writes about a Greek default, Italian solvency and euro zone dissolution.

The Fed feels politically constrained due to its own machinations in the past and the likelihood it will engage in a muscular easing policy if and when the US economy double dips. It does not want to come under attack for this Euro bank…

What Sinn is making plain is that Greece’s balance of payments problems would not go away if Greece were to remain in the euro zone. And this would mean more indebtedness and further transfers to Greece down the line when they get into…

The European Central Bank was once known for its focus on price stability. Since the global economic crisis, however, its role has extended to saving banks and sovereign countries. This column argues that such a move has badly harmed the…

At issue was the planned increase in the euro rescue fund to 780 billion euros from the present 440 billion.

The mood in Germany is still about cutting Greece loose to save Italy and Spain