Europe

The media and some pseudo-analysts, and, surprisingly, even some investors, still don’t understand what the 21 percent haircut in the Greece bond restructuring is all about. The 21 percent touted about is simply the hypothetical…

The Bloomberg interview with David Blanchflower of Dartmouth College last week captures the essence of the European sovereign debt crisis. The essence of what Dr. Blanchflower says is this: European policymakers are leading from the rear…

Dollar and yen maintain supportive tone amid global growth concerns; ECOFIN meet to discuss EFSF. Important week ahead with focus on data and policy; potential shifts from the ECB and BoE possible. US NFP excluding Verizon expected to…

Asia and European session dominated by safe haven flows; Fitch & S&P both downgrade New Zealand. Germany’s upper house and Austria vote on EFSF measures; we still feel EFSF 2.0 is still not enough. Brazil’s budget and inflation…

Dollar is paring back its overnight gains as Germany ratifies changes to EFSF; European banks higher. Ratification of the EFSF sets the tone for a shift in the political agenda; Q2 US GDP expected higher. Brazil’s August wholesale IGP-M…

I think these two quotes sound pretty similar. They both blame Europe for the world’s economic problems. The inference is that all would be well if it weren’t for those Europeans.

Warren Mosler argues that it is the realization that the ECB is the issuer of the currency, and is therefore not revenue constrained, that leads to the conclusion that not allowing Greece to default best serves public purpose.

Former ECB chief economist Otmar Issing recently spoke to German weekly Stern in an interview now published online. His view is that the appropriate strategy for dealing with Greece is to force a hard restructuring and a large writedown of…

Most of the writers whose work appear on this blog have long warned that the extend and pretend strategy in Europe would fail. Now, it seems that Europe is moving to a hard restructuring for Greece and recapitalisation for bank creditors.…

Market sentiment continue to improve modestly; European stocks and US futures both advance. Finland ratifies changes to EFSF, Germany votes tomorrow; EUR/USD trades just ahead of 1.37. EM price action of IDR & KRW reinforces themes;…