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The Bernanke critics are wrong ?
The answer is "yes", that is if you read today's main article on Bloomberg. The main story line being : "The criticism about the FED being inflationary is not fact-based. Unemployment is slightly improving but far from inflationary levels. And though several republican presidential candidates are claiming Mr Bernanke is the most ...
De krekel en de mier, wie heeft er het laatst plezier?
Dit oude sprookje kennen we haast allemaal, we herinneren ons vast en zeker het idyllische plaatje uit onze kindertijd. Een hard werkende mier die de ganse dag eten versjouwt en opbergt in haar ondergrondse verblijfplaats, terwijl de krekel in de zon ligt te fluiten en te zingen dat het een plezier is om te horen. Het laatste ...
Damaged collateral
The LTRO operation of late December by the ECB has relieved some tensions on money markets and bank funding cost in the short term. Indeed, libor spreads have come in considerably while certain government bonds have had a serious rally versus the core led by Bund. It doesn't stop quite there and the ECB is preparing another set of ...
Lucky shamrock performing Irish miracle escape ?
For once we have some good news to report, a glimmer of hope. Last week, Ireland managed to come to the international bond market on which it made a partial buy-back of existing debt (2014) and managed to roll it over into 2015 @ 4,9%. And it was a success with an announcement of more buy-backs in the pipeline. The Irish drama and ...
FED and 5 year "risk free" heading to 0% boundery
May you live in interesting times", so goes the English translation of a Chinese curse/proverb. And indeed we live in interesting times because the FOMC yesterday decided to shift the outlook on a 0% short term rate from 2013 to
at least
2014. And at the same time, the FED made some choices on explicit ...
On the IMF, sprints, marathons and hybrids
A funny string of recent events have captured my attention. And it involves the IMF and politics. May be far fetched but a warning as well towards various addressees, either politically, economically or both. And the IMF is balancing here on a thin line judging the noises we are recently hearing.First of all there was Christine ...
Middle East NIMBY
One of the many things not resolved yet but equally important going into 2012, is the the geo-political issue of Iran. End of late November, we reported on this story and it seems that some options have already materialized, such as the US and European embargo on Iranian oil. Or on any one doing business with Iran, in real goods or ...
Going French on sovereign debt solutions
When the going gets tough, the tough usually gets going. In the case of the sovereign debt crisis, we have the Greek discussions with private creditors coming to a halt and a March deadline coming up (will the IMF grant a new tranche of loans ?). In the US, we are getting prepared for a repetition of the debt ceiling debate of late ...
"Dear Mr(s) Credit Rator"
We in Europe - the old continent - have taken notice since late Friday that our credibility as a debtor has been put into question. We were warned earlier that something was waiting to happen. Now that it has materialized, I nevertheless have some questions running through my mind lately, based upon the following ...
Money for nothing, de olijfboom en andere olie
Iemand betalen om je geld gedurende lange tijd bij te houden, geen zinnig mens zou dat doen, en toch is het wat deze week opnieuw met meerdere miljarden gebeurde.Duitsland sleet voor bijna 4 miljard aan obligaties en doordat de uitgifte boven pari gebeurde zorgde een lage intrestvoet ervoor dat de crediteur op vervaldatum per saldo ...
Something is rotten in the state of Uncle Sam
With the recent change in FED "speak" strategy, more transparent communication and the new composition of voting members within the FOMC - kingdom of the doves and the last hawk having left the building - market speculation is rising that a new round of QE3 will be announced very soon. On the desirability of such a new program and ...
Voorkomen "nieuwe" fiscale regels volgende euro-crisis ? (2):It is private leverage, stupid!
Onze vorige post over de nieuwe fiscale regels voor de Eurozone (het "Fiscal Compact") stelde dat de "nieuwe regels" (o.a. de beperking van begrotingstekorten tot 3% van het BNP) nauwelijks verschillen van de "oude regels" van het Groei- en Stabiliteitspact (GSP). Het GSP werd niet nageleefd en voorzag geen prikkels voor ...
Are we liquidity trapped ?
A liquidity trap is a situation when people are hoarding cash, this out of various reasons. A standard definition would say because people are expecting an adverse event, such as deflation, insufficient aggregate demand or war. The classic debate between Keynesians and Austrians focus on the "why", not the fact that cash hoarding ...
On the Bundesbank, Kids & Credit Cards : Half a trillion, this time EUR
"Involuntary lending is what happens when your teenager figures out how to charge stuff to your credit card. The kid promises to pay for the purchases but never gets around it, so your involuntary loan keeps getting bigger. At some point it dawns on you that you might never get your money back"
...
Solely I owe the Flemish taxpayer 100%
After issuing a public tender, the Flemish government has apparently made a decision on their new preferred home banker. ING came out as the winner. And already a lot of fuzz going on that it's a shame a non-Belgian, or non Flemish banker for that matter, has been elected. Dexia has announced it will take the decision into ...
Een zakenkabinet: zonder of met?
Mario Monti en Lucas Papademos zijn de kersverse premiers van Italië en Griekenland. Met doctoraatsdiploma’s economie van MIT en Yale op zak en topcarrières in de Europese Commissie en Europese Centrale Bank zijn het rasechte technocraten. Vormt de aanstelling van deze niet-verkozen leiders het einde van de democratie of het begin ...
Paramo preparing us for an ECB silver bullet ??
Last Sunday (blog pick 1 out of 3), I took the liberty of freewheeling into the minds of our policy makers. We had already ruled out the EFSF or SPV/CDO option, both on grounds of credibility and political feasibility (Germany). But we also suggested that the ECB might be tempted to come into action but not as last resort buyer at ...
EEE : Crisis update & Echoes from Brussels
At the Econopolis Economic Encounters on 28/11, we had the pleasure to have Nouriel Roubini - Dr Doom & Gloom - and Ivan Van De Cloot, Chief Economist of Thinktank Itinera. Both were asked to pinpoint the state of play of the current financial crisis, their short & long term expectations and recommendations on the way forward. Dr ...
Pick 1 out of 3
So we finally came to an agreement and every one seems to be a winner. And that's how we are selling the story to the outside world, hoping they will buy it. Because that's all in the end that matters. I think we have 3 possible outcomes of which 2 out of 3 won't do the trick and 1 has the potential to trigger some "hup hup, barba ...
Kabuki
In our previous posting, we mentioned that not a lot of safe havens still exit in the world of today. Which sovereign bond can I trust, what kind of monetary system will be there the day after tomorrow etc. Recently we have seen some strange developments occurring in financial markets, confirmed by international investors net in- ...
















