bailout

Postmortems of last month’s European Union summit meeting have now turned to why the Greek debt rescue failed to restore investor confidence in the country’s finances. Many reasons are advanced: the failure to communicate clearly; the…

We repeat: the “debt problem” is a currency problem and the currency must and will collapse. The global monetary system exists at the pleasure of the Fed, which legally exists at the pleasure of Congress, which as we have learned only has…

The widening European sovereign debt crisis is a direct result of this dangerous extend and pretend policy. Tomorrow we will see whether the ECB has the temerity to step in and start buying up Belgian, Italian and Spanish debt to stem the…

Institutional investors have learned how to create and game self-fulfilling prophecy runs in various asset markets. (George Soros understood this and demonstrated its efficacy with his effort to break the pound in 1992.) Indeed, this is one…

The Europeans can’t catch a break. The crisis has already flared before they have had a legitimate opportunity to deal with the medium- and longer-term issues. Willem Buiter says the Europeans need a 2.5 trillion euro EFSF to deal with…

As Europe’s leaders struggle to convince markets that their Greek debt problem-resolution-proposals are actually viable, and will really do the trick, last week’s flash PMI readings seem to have attracted rather less attention than they…

Felix Zulauf spoke to Barron’s Alan Abelson about his thoughts on the European sovereign debt crisis now that Greece has received its second 100 billion euro bailout. Here I discuss what Abelson says about the conversation and why I think…

Michael Hudson argues forcefully that the juxtaposition of bailouts for the largest American banks and cuts for ordinary Americans makes clear that government is promoting a redistribution of income to upper income brackets. He sees the…

In the last post on the EU, I said that the EFSF is too small. Basically, only the ECB has unlimited liquidity in its arsenal to deal with contagion to Spain and Italy. Willem Buiter agrees and has spoken to Bloomberg about his analysis of…

This step will calm markets – for how long is anybody’s guess. Nevertheless, the budget cuts that this deal requires must be rapid in order to try to calm markets by maintaining the fiction that Greece is not insolvent and that the…