Euro Zone Strikes Deal on 2nd Greek Package, EFSF

The markets like the announcement. Of course they also liked QE2… Unfortunately, as previously discussed, without the ECB the EFSF isn’t sustainable. It’s like trying to lift up the bucket by the handle when you are standing in it. Nor is it cast in stone yet, but all subject to details. Also, the positive market […]


Looks like Merkel is speaking purely for political effect, which may be all she’s capable of, unfortunately. Fact is, from the beginning, without the ECB ultimately writing the check, it’s all been in ponzi. And like all ponzi’s, it seems to work on the way up, and disintegrates on the way down. With the ECB […]

ECB’s Stark: US Has an ‘Enormous’ Debt Problem

So much for Jeurgen’s legacy: US Has an ‘Enormous’ Debt Problem: ECB Official September 1 (CNBC) — A debt crisis is still gripping the developed world, European Central Bank policymaker Juergen Stark said, adding there was no alternative but for countries to take painful steps to consolidate their public finances. “The crisis is not over. […]

Fears Grow over the Fate of Irish Economy, Banks

The two external shocks of the summer were China, which historically has had second half slowdowns due to State lending front loaded to the first half, and the euro zone which became a ward of the ECB. China’s growth has slowed some, but not collapsed, and the ECB has continued its support of euro member […]

Hanke on Greece

Hate to criticize someone proposing a payroll tax holiday- darn that Lerner’s law! A Big Bang for Greece There is a way out of the debt trap for Athens. By Stece H. Hanke June 30 (WSJ) — How did Greece get into the death spiral that it’s in? Unfunded entitlements. In other words, promise somebody […]

ECB’s Trichet Says European Economy Showing ‘Encouraging’ Signs

The ECB has ‘written the check’ by buying national govt bonds in the secondary market in sufficient size to allow the national govs to fund themselves, and equities are coming back as solvency fears abate. There is still solvency risk, but now that risk is the risk of the ECB cutting off any nation in […]

EU Daily | European Industrial Orders Increase for Third Month

As previously discussed, it is possible their deficits already got high enough and the euro low enough to support very modest growth when market forces intervened to stop further fiscal expansion. One problem now is proactive cuts can set them back if a combination of private sector credit and exports doesn’t expand at the same […]

ECB Official Raps IMF’s ‘Helicopter Money’

[Skip to the end] He’s right on this point. Functionally it is fiscal expansion, though not all that much as a percentage of world GDP. The question is whether I’s warranted to support demand and how to decide which nations should get it: ECB’s Stark raps move to boost IMF drawing rights by Marc Jones […]

ECB’s Stark bravado

[Skip to the end] No mention of the $300 billion they’ve borrowed from the Fed to stay afloat… ECB’s Stark Says Euro Prevented Worse Crisis Fall-Out, RBB Says Jan. 5 (Bloomberg) — The euro has shielded the nations using the single currency from greater fall-out from the financial crisis, European Central Bank Executive Board member […]