Death Star Economics



In Europe, the rate of concern keeps rising

If we think about for how long concerns about the eurozone have been growing already, it makes me wonder just how muchconcern is necessary (also, is this a compounded rate of concern?), before it turns into some ludicrous version of panic

News of the day: The ECB left its core interest rate where it was before (1.00%), just as everyone had predicted. This will probably end up with an idealistic discussion about monetary policy that could last for the rest of the week. Also, now that the rate has been left alone, it is more likely that it’ll get cut even further next month.
As MarketBeat puts it:

But there is only so much the ECB can doThe fix for the euro-zone’s woes must come from its governments. Any relief the ECB could provide would be temporary in nature, and ultimately would allow Europe’s governments to put off making any hard decisions to solve the crisis.

Sounds inefficient and pretty much exactly like what we’ve been seeing in all those EU summits. Tell me again that the EU has turned into ze German Union, ja…

Speaking of Germany. YesterdayGermany has rejected using the various European bailout funds to directly inject cash into Spain’s crumbling banking system. It’s a game of chicken to achieve more or less the same thing. Germany wants Spain to request a bailout from the EFSF and then do with it whatever they please, while Spain wants Germanyto agree to direct financial aid for its struggling banks only. The difference seems mostly semantic and legal, but either way, it might be time for things to get going.

Oh, look at what happened there! Confusingly using the same picture, the FT reports that Spain is now down on its knees, begging for European institutions to please do something and suddenly liking the idea of eurobonds.

Here’s what else happened over the long weekend:

– At the EU-Russia summit on Monday, leaders (always has a communist ring to it, doesn’t it?) discussed Syria and, who would have guessed, the euro.

– Also on Monday, Portugal injected €6.6bn in three of its banks (Banco Commercial Portuges, Banco BPI and Caixa Geral de Depositos) to help them meet European capital requirements. Portugal is sort of following its recovery plan, but the EU appears to keep planning for another bailout. The plan, which states that the country could go back to raising funds from the private sector again next year, is endangered by Portugal’s current high borrowing costs.

– Finally, George Soros gave a speech about the eurozone and the end of civilization as we know it on Saturday, here’sEzra Klein’s dissection of it.

All this is making the topic of discussion for this week: the European stab at a banking union.

Maybe we all need something to laugh this day off. Thank god, Charlie Sheen is on the cover of Rolling Stone this month. That ought to be good.

So long.


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One Response

  1. princess1960 says:

    thank you first ..and i start the day reading because I think there i find Y and i finish my long day again reading beacause this make me feel i am in contact with Y .anyway ..this is my problem not yours ..i read to day what is more intristing for me . and i have to say i get some intristing information (not because i did’t know) YOU are righte not (allways ) but i am in your side always because you are mine ..ABOUT Rolling Stonse NOONE HAVE FIND THE we need to have one limit for our selfs …not in love but in way of life we live….i am really happy i can read and be conntact with Y ..sometime i try to keep my ego..( iam to much ) but for a strange reason with Y IS DESSAPIRE..
    ps .G SOROS make a good analysis ..(even you) ..but he was categorematico…HEY …Y ..are everywere..(i am not)

    about GER and others country s EUZ you know very good what is the problem ,but this problem doesn’t find solution with other disaster .(.destroit gold)….you are very smart economist-politice and i am sure you know very good what iam said ..BAD politice follow many years make seriusly problem and this politice will send the world in catastoph..if doesn’t change ..for some reason (i don’t) know THERE wanted to get money everywere this is in my deep logic (maybe) wrong ..NOone MA NOone make sacrifice what have …and even is not to much see here in GR the people have take a littel money have from bank’s because doesn’t wanted to lose ..

    ps ..i will like you said to me i have right ..

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