By Reggie Middleton
I’ve been very bearish on the EU and their banks and sovereign debt in particular, since Q! 2010 – way before most – reference . Yesterday morning if you were to Google the term EU recovery, you would see something like this in return…
Well, somebody better tell Draghi, as per Bloomberg: ECB Cuts Key Rate to Record Low to Fight Deflation Threat
The European Central Bank cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable.
Policy makers meeting in Frankfurt today reduced the main refinancing rate by a quarter point to 0.25 percent. The decision was predicted by three of 70 economists in a Bloomberg News survey. The ECB kept its deposit rate at zero and trimmed the marginal lending rate to 0.75 percent. ECB President Mario Draghi will hold a press conference at 2:30 p.m.
The ECB now has just one more quarter-point cut left before reaching zero, increasing the likelihood of unconventional tools such as quantitative easing or a negative deposit rate if prices slow further or the economic recovery stalls. Euro-area inflation is less than half the ECB’s target and unemployment is at the highest level since the currency bloc was formed in 1999.
“There comes a point where inflation is so weak, and coming in weaker than anticipated, that the case for loosening policy becomes too hard to resist,” said Richard Barwell, senior European economist at Royal Bank of Scotland Group Plc in London, who predicted the cut. “Bad unemployment numbers only make the case stronger.”
Does it seem like I’ve predicted the future hear once again as that Financial Nostradamus Dude???……………………………
full article at source: http://boombustblog.com/blog/item/9171-is-the-ecb-implementing-zirp-or-zeurp-zero-european-union-return-on-potential
If you are trading in this market you need to be listening to this guy !
The markets are been pushed up and there is nothing underneath to keep them there or at current values! The art of trading has all but vanished as we are now pit against algorithms and super computers and to survive you must be hedged at all times and well informed .This site (boombustblog.com) is a great start!
By Gorge Soros
My objective in coming here today is to discuss the euro crisis. I think you will all agree that the crisis is far from resolved. It has already caused tremendous damage both financially and politically and taken an extensive human toll as well. It has transformed the European Union into something radically different from what was originally intended. The European Union was meant to be a voluntary association of equal states but the crisis has turned it into a creditor/debtor relationship from which there is no easy escape. The creditors stand to lose large sums of money should a member state exit the union, yet debtors are subjected to policies that deepen their depression, aggravate their debt burden and perpetuate their subordinate status.
This has created political tensions as demonstrated by the stalemate in Italy. A majority is now opposed to the euro and the trend is growing. There is a real danger that the euro will destroy the European Union. A disorderly disintegration would leave Europe worse off than it was when the bold experiment of creating a European Union was begun. That would be a tragedy of historic proportions. It can be prevented but it can be prevented only with Germany’s leadership. Germany didn’t seek to occupy a dominant position and has been reluctant to accept the responsibilities and liabilities that go with it. That’s one of the reasons for the crisis. But willingly or not, Germany is in the driver’s seat and that is what brings me here.
What caused the crisis?…………………………………………….
Read full article at http://www.project-syndicate.org/blog/a-european-solution-to-the-eurozone-s-problem#6mMv7wyQVcBL8cGj.99
By Florian Pantazi
Slowly but surely, the set of remedies employed in the hope of solving the euro crisis is now spreading recession from the periphery to the core of the eurozone. Austerity measures, accompanied by an increase in taxes, will bring France’s economic growth to a halt next year. Germany’s growth rate, based on its solid export machine, is also showing signs of slowdown. As the European Union is the world’s largest economy, its troubles are spreading economic stagnation to its main trading partners – China, the US, Japan and Brazil – as well.
The launch of the European Stability Mechanism (ESM), currently hailed as a kind of European monetary fund, has recently re-ignited hopes of appeasing financial markets. Alas, the only lasting solution to the euro’s woes is that of allowing EU national governments to sell their treasury bonds directly to the ECB, thus totally bypassing financial markets.
In truth, no state should be subjected to the same financial pressures and performance criteria that private corporations normally are. To give but one example, prior to 1973 the French government was able to borrow directly from its national bank at zero interest. Through the introduction of private or institutional investors into the equation, as market intermediaries between national banks and their governments, the stage is set for astute financial speculators to increase returns for their clients on the backs of states in need. Rating agencies, acting on behalf of investors, are able to exert pressure on governments to reduce expenditure on essential public services, as it has happened it the EU over the past few years.
full article at source: http://www.europesworld.org/NewEnglish/Home_old/CommunityPosts/tabid/809/PostID/3293/Apossibleexitfromtheeurocrisis.aspx
By David Mc Williams
Greece has defaulted again, and the financial markets have shrugged their shoulders. The euro remained unchanged versus the dollar. The Greek stock market even rallied. What does this tell us? It tells us that, as this column has argued again and again, the markets have no memory. Because it improves the overall position of a country, a debt restructuring will be welcomed since it adheres to the golden rule: a broken balance sheet is made better by less debt not more debt.
The media is reporting this as a “deal” in Greece. It is not, it is yet another default from a country where the economy is destroyed and needs to be nursed back to health rather than punished.
The big news for Greece and for us is that the troika has accepted that the country must be healthy in order to pay debt. This logic applies to Ireland too. Before we focus on the implications of the latest Greek default for us, let’s look at the broader picture. And before you think that I am advocating we follow the Greek route, I am not, I am simply pointing out the reality of the global economy and the realpolitik at the centre of Europe.
Effectively, the troika and the Europa group of Greece’s creditors have “agreed” (rather they have had their hands forced) to restructure their bailout loans. Interest rates will be lowered and even deferred to give Greece breathing room.
full article at source: http://www.davidmcwilliams.ie/2012/11/29/greece-is-the-word-if-you-want-to-know-where-we-go-from-here?utm_source=Website+Subscribers&utm_campaign=1b3f442441-22112012&utm_medium=email
Britain’s Foreign Secretary William Hague accused Germany of alienating many from European ideas by pushing too hard for too much integration. “Sometimes less is more,” he said at a policy forum in Berlin.
He said the push for ever-greater coordination in areas like the banking sector and national budgets to fight the euro crisis risked in fact driving a wedge through the EU – creating mistrust particularly in his own Conservative Party, currently in an ill-tempered coalition with the British Liberal Democrats.
“The coalition government is committed to Britain playing a leading role in the EU but I must also be frank: public disillusionment with the EU in our country is the deepest it has ever been,” Hague said.
“People feel that in too many ways the EU is something that is done to them, not something over which they have a say… People feel that the EU is a one-way process, a great machine that sucks up decision-making from national parliaments to the European level until everything is decided at that level.”
He added: “These points may be felt most acutely in Britain but they’re not felt only in Britain.”
As Europe faces a growing gulf between the 17 countries of the eurozone which have the euro currency, and the remaining 10 EU member states, Germany Foreign Minister Guido Westerwelle insisted all 27, including Britain, should encourage a sustainable end to the euro crisis………………………………..
full article at source:http://www.thelocal.de/politics/20121023-45727.html
The euro crisis is not over and is about to get interesting … Supposedly the euro crisis is all over. The mighty ECB has spoken. I have received triumphalist suggestions from bastions of euro-fanaticism that I should now capitulate. ECB bond-buying will cut borrowing costs for ailing eurozone nations but that is not the essence of the euro problem. – Roger Bootle/UK Telegraph
Dominant Social Theme: This time the Eurocrats will get it right. Central bank bond-buying is the magic bullet!
Free-Market Analysis: Is central bank bond-buying the key that unlocks the Euro-crisis and provides a solution? Well …
We still remember the triumphant announcement several years ago that Germany’s Angela Merkel and France’s Nicolas Sarkozy had saved the European Union by coming up with a fund that would provide enough cash to impress upon the bond market that Europe was solvent.
We remember the breathless, behind-the-scenes reporting that Sarkozy had threatened to leave the union if Merkel didn’t capitulate to his terms. Horrors!
full article at source:http://www.thedailybell.com/4279/Elites-Play-Waiting-Game-with-Europe