ECB

Assuming that the Greek and Italian political situation stabilize, the focus may shift back to the Iberia. The risk is that the new Spanish government will report a larger budget deficit and weaker finances in general than the outgoing…

Countries like Italy are simply not going to be able to grow their way out of the problem. Everyone is recognizing this now. Until Italy was at the heart of the crisis, we could all delude ourselves that this crisis could be met with…

The euro zone periphery was a sideshow. This stuff with Italy is the real deal. With yields at 6.7% and rising, it’s game over for the euro zone. The extend and pretend stuff ain’t gonna work.

Let’s talk about credible government bond backstops for a bit.

If a central bank guarantees investors credibly that they can invest in certain debt instruments and not suffer principal or interest repayment risk, but only currency and inflation risk, some investors are almost definitely going to buy…

So what is the trade? If Italy continues to blow out and a big bazooka EFSF bailout fund is not attainable, the EU will be faced with certain death or massive ECB bond purchases. We think they will choose the later, which makes the Euro a…

Harvard Economist Kenneth Rogoff has a post up at Project Syndicate which does a good job in laying out the conundrum that Europe faces in the sovereign debt crisis. He theme is exchange rates and currency revulsion. But the underlying…

"Based on its regular economic and monetary analyses, the Governing Council decided to reduce the key ECB interest rates by 25 basis points."

Imposed austerity does directly alter output and employment- for the worse. Additionally, for all practical purposes, there is universal global support for austerity as the means supporting global output and employment. So even if the euro…

European stocks rebounding amid talks of Greek government collapse, potential referendum withdrawal. ECB likely to remain on hold but signal December rate cut; US service ISM key data report today. EM focus on potential for China easing…