interest rates

ECB President Draghi confirmed the decisions made today to cut the main refi rate by 25 bp to 50 bp and cut the lending rate, the ceiling of its rate corridor, by 50 bp. Most importantly he seemed more open to a cut in the deposit rate and…

It seems that the markets are discounting many of the risks that have plagued Ireland's economy in recent years. Ireland's stock market has significantly outpaced the S&P500 in the last few months - ISEQ is up 20% over the past year.

Spain's 10-year bond yield has fallen 108 bp this year. Just above 4%, the yield is the lowest Q4 2010. The 2-year yield has fallen 93 bp this year. The yield is slipping through 1.70%, for the first time Q2 2010. Recent data suggested that…

Whatever the case, the ECB will have to act in order to avoid the dangers of a deflationary spiral, which could take the Eurozone years (or even decades) to exit.

There have been three recent developments in Spain: the new record high unemployment, the earnings reports of several large banks, and the government's new fiscal forecasts and strategy. Spanish 10-year yields continued to trend lower…

The Swedish krona is somewhat firmer today but it is the biggest loser among the major currencies this week. It has lost about 2.3% against the dollar and 2.1% against the euro. According to Bloomberg, this is the single biggest weekly…

Gold is breaking down in a big way right now. We are well into bear market territory here. Marc Faber thinks it could fall to $1300... before rebounding. A number of noted goldbugs are talking about a Fed conspiracy. So what is going on…

This is a good interview with Kyle Bass because it cuts to the heart of the matter. If you are a partisan in the Bass debate on Japan, you can see him as being either correct or incorrect. Now, I have covered this before and I have stressed…

According to an analysis by Reuters, small and medium-sized banks in the US have started to take on risk as the squeeze in net interest margins is beginning to hurt profitability. The goal is to boost returns despite the low-interest rate…

Now the bad times are back, Paul Krugman is trying resuscitate IS-LM, a model published by John Hicks in 1937 that seeks to explain the relationship between interest rates, and real output in goods and services and money markets. I argue…