Posts Tagged ‘Euro Crisis’

Dealers Declining Bernanke Twist Invitation – Bloomberg

July 9, 2012

Not a good sign:

Wall Street banks are increasingly choosing to hoard their U.S. bonds rather than sell them to the Federal Reserve as speculation grows that a slowing economy and global financial turmoil will only make them more dear.

via Dealers Declining Bernanke Twist Invitation – Bloomberg.

David Cameron ‘prepared to halt immigration of Greeks into UK’ | UK news | The Guardian

July 4, 2012

Beginning of the end?

David Cameron is prepared to override Britain’s historic obligations under EU treaties and impose stringent border controls that would block Greek citizens from entering the United Kingdom, if Greece is forced out of the single currency.

via David Cameron ‘prepared to halt immigration of Greeks into UK’ | UK news | The Guardian.

Why devaluation isn’t a viable option for Greece: Insights from a small open economy | vox – Research-based policy analysis and commentary from leading economists

June 25, 2012

The essential point missing from the recent debate, is that small open economies are different: international economic shocks hit them especially deep and hard, and in the short term they have little choice but to absorb the blows and try to remain on their feet. Above everything, they should protect the value of the currency, by allowing the shock to feed through to a fall in real income. If there is to be active fiscal management, it should be in the service of maintaining the exchange rate anchor by matching import spending to foreign exchange inflows. Targeting the money supply or inflation, with a flexible exchange rate – the conventional policy prescription – produces a worse result. There is no additional foreign exchange earned or saved, real income falls by as much as is necessary to balance the external accounts in any event, and exchange rate depreciation imposes an avoidable inflation penalty that becomes entrenched in expectations.

via Why devaluation isn’t a viable option for Greece: Insights from a small open economy | vox – Research-based policy analysis and commentary from leading economists.

‘Bailout’ seems to be the hardest word for Spain’s prime minister | Miguel Anxo Murado | Comment is free | guardian.co.uk

June 13, 2012

More and more people in Spain say they fear our government is not telling us the truth. I fear worse: I’m worried the government really believes what it says.

via ‘Bailout’ seems to be the hardest word for Spain’s prime minister | Miguel Anxo Murado | Comment is free | guardian.co.uk.

FT Alphaville » On the (marginal) advantages of the Greek bank jog

June 12, 2012

FT Alphaville » On the (marginal) advantages of the Greek bank jog.

The Hundred-Billion-Euro Bomb: Euro-Zone Central Bank System Massively Imbalanced – SPIEGEL ONLINE – News – International

March 6, 2012

So, the will of the political class to preserve the union is strong. It is the rabble that might not like the terms.

After weeks of work, Sinn had assembled enough pieces to create a picture that would make any one shudder: Since the 2007 financial crisis, immense imbalances have formed within the otherwise harmless payment system that exists between the central banks of the 17 euro-zone member states. While Italy, Spain, Ireland, Portugal and Greece, all hit hard by the debt crisis, show deficits totaling over €600 billion, the claims owed the Bundesbank have climbed to €498 billion.

‘Caught in a Trap’

As long as the monetary union continues to exist, this isn’t a catastrophe. The money is virtual, created by central banks, and its existence doesn’t mean that an equivalent amount is lacking elsewhere. But as soon as a country leaves the euro zone, or the currency union collapses entirely, things get critical.

via The Hundred-Billion-Euro Bomb: Euro-Zone Central Bank System Massively Imbalanced – SPIEGEL ONLINE – News – International.

Italy’s Mason-Dixon Line: Euro Crisis Fuels South Tyrolean Separatist Dreams – SPIEGEL ONLINE – News – International

March 6, 2012

Scary. So, if Italy leaves the Euro, does Italy fragment into Northern and Southern Italy?

What is happening in Italy’s northernmost and wealthiest province mirrors the larger euro crisis: The rich north doesn’t want to pay for the poor south. In the 1950s and 60s, this attitude was reflected in the “Away from Rome” movement, which, until recently, was considered just as outmoded as the prejudices of Northern Europeans against Southern Europeans that have now been brought to the surface by the crisis.

via Italy’s Mason-Dixon Line: Euro Crisis Fuels South Tyrolean Separatist Dreams – SPIEGEL ONLINE – News – International.

The Failure of the Euro

March 5, 2012

The Failure of the Euro.

The fragmentation of the Euro foretold at the inception in 1999. The overarching argument was similar to the argument I made in 2007 about the Euro. The economic union combines together a large heterogeneous group of countries that will have to adopt divergent fiscal and monetary policies to address the problems of the Great Recession.

Nuclear Phynance

March 5, 2012

Nuclear Phynance.