Death Star Economics



Euro[pe] 2.0, or doing whatever it takes

So yesterday, Mario Draghi put some meat on the bare bones of his “doing whatever it takes”-skeleton and officially revealed the ECB’s latest bazooka. The bond purchasing program that tastes a lot like QE, comprises of the unlimited buying of European government bonds with maturities between one and three years. The whole charade is called OMG OMT, for Outright Monetary Transaction. According to Draghi, the OMT plan is an “effective backstop to remove tail risk from the euro area.” Alright then. Watch the rally while you canread article

Yesterday, Morgan Stanley remarked that one reason of the ECB’s vague plans may be the prevailing disagreement within the institution about whether bond buying would actually accomplish anything. But the only outright criticism came form Germany – as expected… The Handelsblatt called it a “blank cheque” and Jens Weidemann, president of the Bundesbank was the only ECB council member who voted against the plan, but said he would not stand in its way [any more than he already does].

The next important date in the eurozone crisis diary is now Germany’s final ruling on the European Stability Mechanism on September 12.

Meanwhile, Glencore is doing whatever it takes to save the Xstrata merger (trending phrase, by the way…). The company cancelled this morning’s shareholder meeting about the Xstrata merger, to put a new proposal on the table. This one would amount to $37bn and include raising the merger ratio of shares from 2.8 to 3.05. We shall see what the Qataris say to that.

Across the globe, central planning (*cough*communism*cough*) at its finest: to boost economic growth and domestic demand [for construction in this case], China has commissioned to build 2,018km (1,254m) of roads. It is, quite literally, doing what(ever) it takes… This is in addition to yesterday’s announcement on subway construction projects in 18 cities across the country.

And in the US, we’re seeing nonfarm payroll and unemployment data in about an hour’s time. Expectations brought to you by Goldman Sachs, here.

Weekend reading

– Signal and noise, an excerpt from Nassim Taleb’s new bookread article

– Shut up about hyperinflation, will you? Enter Felix Salmon, read article

– Assessing Michelle Obamaarms role as a “partisan weapon”read article

– How we didn’t notice the decrease in US credit card debtread article

Have a good one.


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2 Responses

  1. princess1960 says:

    hello .. TO MUCH THINK’S
    EUZ ECB is one step for give a brief IT SP and indirecte GR …for me MD trying to help with last cart …in futuro this will be very very difficulte..bounsbuy under IMF controll mean not EUZ very soon ..or not( euro)..but other nomizma..
    –Germany is ressponibility for this (not good job) and what is surprise GER pay..ha…
    Glencore ..i think QATAR have very good propose ..(intristing) for both
    GSACHS is institution with power ..and strict ruls..
    –M D ..i read the answhere from confrence press in general (not honest)
    UNemployment …wow .this is the first of all problems (recapitalise banks)
    CHINA a true we have to learn from them WHY ?make smart investim infrastructure ..(megala erga) with small cost..with high employ( free hand force) 0,5 cent in —1 cent in day ..
    others iread late…..
    sorry if sometime something go wrong..

  2. princess1960 says:

    noise and signal..Psichology ..(noise in Greek mean phasaria..)and we have Noise for Nothing ..or Noise with Signal–(signal is proidhopisi) for some thing .”.speciphyce.”.is completly diffrent I don’t think have to do with one theme .OR one news ….Iam reading now MORAL MINDE M.H is very intristing and i think help to understand anatomy human body and mind (psychology)too
    TH U

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