Europe

Listen: they can go kicking and screaming all they want to but, unless they’re on board to with ending the euro, it seems likely that the rich nations in Northern Europe will end up bailing out their poorer brethren. Whether they call it a…

The end of year is usually a good time for markets. There was a lot of angst about the European situation a few weeks ago, but there is less of that now because we're hitting year-end (tape painting). Does that mean the credit crisis…

The key question remains what the banks will do with the newly acquired funds. We suspect that to the extent banks buy sovereign bonds, they will purchase their own sovereign's bonds rather than their neighbor's. More details of the nuances…

I thought I should highlight that Marshall Auerback was on Fox Business yesterday since he writes here occasionally. I wish it were more often! Marshall was on message regarding the euro zone debt crisis. His point: Additional liquidity is…

News links for 21 December 2011 including notes on technology, the sovereign debt crisis, elections, and Europe

The last post by Randall Wray below is an interesting one because it points out how the world has changed since the end of the gold standard and why the sovereign debt crisis is centered in the euro zone. While I have an Austrian bias…

The euro extended its rally to a six day high, just shy of $1.32 before the results of the ECB's allotment. The results were at the upper end of expectations and the euro was returned to session lows. A classic buy the rumor of a strong…

Following the 1-year repo in June 09, there had been market talk of the money going into the short-term Italian and Spanish bonds. Yet we don't expect as much of new carry trades some officials might wish. The lion's share of the funds LTRO…

We are in a second synchronised global growth slowdown. Moreover, the policy response must be more muted this go round as the public sector is more indebted and has less policy space than in 2008 or 2009. Expect policy inaction followed by…

Successful Spanish and Greek bill auctions and better than expected German IFO caught the market wrong-footed, if the record net speculative short at the IMM is anything to go by. The euro has shot up to almost $1.3090 and pulled up the…