Tag Archives: ECB

Greece – GREXIT = Export Miracle …err, hang on…

So nobody knows what is going on in Greece. Tspiras seems willing, as he has done all along, to compromise. Meanwhile, Dr Schaubel, which is German for “hell, no”, seems to as willing to be as uncompromising as possible, in between lecturing the ECB

If Greece does GREXIT, which is not certain, this will result in a depreciation of the currency by up to 50% some reckon. And here is the rub. Greece is critically dependent on certain things which will get expensive, while its exports (in trade) are not that large nor perhaps that amenable to rapid rampup in the face of increased demand concomitant on falling prices, or are indeed priced in non Euro currencies anyhow. While tourism and services help, Greece runs a massive CA deficit. The logic of GREXIT is that somehow not only will debt disappear (only if they default in tandem will that happen) but that exports will boom. Well, maybe.

This whole thing has been grossly mishandled, and while the Greeks have a bunch of blame, the TROIKA must take the lions share. If they are, as Lagarde said, the “adults” then its time to start behaving like it.

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Veni, Vidi, Vitavi – Jean Claude Trichet and Ireland

dgtrichetThe departure of Patrick honohan from the central bank caps a week where the Irish public saw the true reality of central bank independence. Continue reading

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A Song for Europe – Mario’s favourite things

Here’s hoping someone will sing this … my voice would etch lead…

 

Haircuts on Greek bonds, ELA exploding

LTROs and OMTs , liquidity flowing

Wondering which of the lefties will win

These are a few of my favorite things

 

Deposits eroding and capital oozing

Taxes evading and cronies a schmoozing

Yanis going cheap via Ger-man Wings

These are a few of my favorite things

 

13 month salaries , no privatisation

Structural reforms that are stuck at the station

Facing the Troika what will it bring?

These are a few of my favorite things

 

When the Dawns comes

When Putin rings

When I’m feeling sad

I simply remember my favorite things

And then I don’t feel so bad

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How do we solve a problem like Mario?

Has the European Central Bank gone feral? If it has this is an appalling vista, and with which must be dealt with. But its not clear how.

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Lessons for 2015 from 1919…

In 1919 Lord Keynes penned a wonderful tome, The Economic Consequences of the Peace. It is a profound work, written by him to express his concern, as an economist, with the punitive and inflexible approach being taken to German debt. It contains nary an equation but is one of the best pieces of economic analysis you will find anywhere. It would be well worth a read by the politicians of Europe.

You cant expect Greece to immiserate itself forever

Germany should realise that a settlement that is generous to Greece will hurt in the shortterm but reap benefits longterm

Debt reduction is the best way forward, then and now…

Handily enough, now as then much of the debt is owed “internally” in a bloc of so called allies…

Just set the payments in such a way as to make it in everybodys interest that Greece trades and prospers

Irving Fisher in 1922 got it spot on…

This government in Greece is soft-medium left. The Nazis await in the wings. Deal with Syriza or reap dragons teeth…

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Next time a German politician moralizes on debt…

Slide1
In 1953 Germany got a debt writeoff at the London Debt Conference. What was good for them is more than good for its European community colleagues.

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January 24, 2015 · 6:52 am

Will QE do the trick for Europe and Ireland?

So the ECB has, years late and trillions short, decided to act rather than to react. Having passively allowed its balance sheet, shrink By €1 trillion over the last two years it has now decided to inflated its balance sheet by €1 trillion over the next two years. One of the things that central banks are supposed to do is to ensure stability. Looking back from the end of 2016 the gyrations of the ECB balance sheet will hardly inspire. Nonetheless the proposal to engage in quantitative easing, of a sort, is welcome. But its more a constipated squeezing than real quantitative easing.  Continue reading

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