Euro-Area Unemployment Climbs to Record as Recession Deepens

EU Headlines:
Euro-Area Inflation Slowed More Than Estimated in February

With catastrophic unemployment prices are still rising. Seems a rethink of their model assumptions are in order.

ECB’s Constancio Says Barnier Plan Not Enough for Bank Failures

Right, the ECB must insure deposits and ensure liquidity and therefore do the regulation.

Europe Relying too Much on ECB, Fuest Tells Handelsblatt

No, not enough. The ECB, like all CB’s, directly or indirectly, ultimately/necessarily provides unlimited bank liquidity and supports member nation debt.

Euro-Area Unemployment Climbs to Record as Recession Deepens

And they all believe in deficit reduction, including Italy’s ‘anti establishment’ Grillo who’s merely proposed default (aka psi, bond tax) rather than other tax hikes and spending cuts.

German Retail Sales Post Biggest Monthly Jump in Six Years

From low levels for a nation presumably doing ‘very well’. It also highlights fact that any currency union requires some form of ‘fiscal transfers’ to sustain full employment. And unfortunately they don’t understand fiscal transfers for the production of public goods and services in fact imposes a real cost on the region with the high unemployment, and therefore hold back on doing it.

Italy Unemployment Rate Rises to Highest Since at Least 1992

The entire culture is being destroyed. It’s a slow motion train wreck. And all the proposals, including default, only add to the deflationary pressures, making it even worse. Call it a self inflicted crime against humanity.

Debt Deliquencies — Student loans climbing – close to 14%

Student loans have been making a meaningful contribution to aggregate demand. If origination slows it’s another negative for growth and output to add to the tax hikes and spending cuts.

This is not to say I favor the student loan channel for education. Quite the contrary, in fact. But just like the savings and loan credit expansion leg propelled the Reagan years, the .com and y2k credit expansion the Clinton years, and the sub prime credit expansion the Bush years, to a much lesser extent the student loan credit expansion has supported the current modest recovery. And when they end the support ends.

The right way to do it is with a tax cut and/or spending increase, but that’s another story…