sovereign debt crisis

In the aftermath of the emergence of a “reinforced ‘Stability and Growth Pact’”, Citigroup chief economist Willem Buiter is pessimistic about growth outcomes in the major developed economies because the political economy of the sovereign…

China has an interest in preventing the total collapse of the largest buyer of its exports, but it also has an interest in forcing Europe to divest its overseas assets. Chinese banks and companies are in a position to be a buyer of some of…

News links for 5 December 2011 featuring stories on Europe, the sovereign debt crisis, and shadow banks,

Italy's government has come forward with an aggressive 30 billion euro austerity package to prevent the country's bankrupcty and pave the way for the fiscal integration that Angela Merkel is pushing as the key to solving the European debt…

It is apparent that adoption of a foreign currency is equivalent to running a very tight fixed exchange rate regime. It provides the least policy space of any exchange rate regime. This does not necessarily mean that it is a bad policy. But…

Here’s a good all-encompassing Bloomberg TV video with Morgan Stanley’s Stephen Roach from Friday. He is not impressed with the IMF plans that the Europeans are working on, calling the numbers “chump change”. Roach also talks about the US…

News links for 4 December 2011.

The probability of a German-led fiscal union in Europe is greater than the consensus suspects given its arguments that only an ECB backstop and a European bond will prevent the end of the greater experiment. In addition, the argument is…

News links for 3 December 2011

My takeaway from two days in DC is that Europe is headed to a blood in the streets outcome. While ECB funding remains ongoing even as it’s uncertain, in any case, the underlying theme remains austerity. There is no plan B.