rate easing

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…

To it’s credit, the ECB has been pretty good on the liquidity front all along. I’d give it an A grade for liquidity vs the Fed where I’d give a D grade for liquidity. Back in 2008 the ECB was quick to provide unlimited euro liquidity to its…

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…

First, there is a disagreement about whether the ECB should be buying a significant amount of European bonds. Second, there is a disagreement over whether the ECB should declare that is it buying bonds for an extended period or unlimited…

This phrase 'lender of last resort' has been bandied around by people who, it seems to me, have no idea what lender of last resort actually means, to be perfectly honest. It is very clear from its origin that lender of last resort by a…

This chart from Der Spiegel shows you that the ECB has been buying a lot of periphery bonds. But, no matter how much they have bought, their purchases are dwarfed by the absolute magnitude of bonds coming due next year in Italy, over 300…

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

Yesterday I was on RT with Demetri Kofinas (@CoveringDelta) talking about the future of the euro zone. Lauren Lyster asked us where this was headed and we both agreed that it really was all about Italy. I just posted on why questioning…

Nouriel Roubini spoke to CNBC today about the Speech that Federal Reserve Chairman Ben Bernanke will deliver tomorrow. Roubini does not expect Bernanke to announce QE3 in this speech. However, he does expect QE3 at some point in the future…

While rate easing and its cousin permanent zero might have some salutary effect in the short term, these policies are toxic to the financial sector and consumption demand. Likely, they will not spur the economy but lead to a deepening…