The power that was Europe

The EU, based on the firm and forced down the throat constitution Lisbon treaty,  is a veritable power house consisting of 27 countries and the IMF. It features two bankrupt countries, one in the west, one in the east, one starts with „I“ the other with“L“. That is enough reason for its curreny queen JCT to be „very impressed by the difference between the old and the new figures.“ He was talking about Latvia. Hell, fucking Jesus Christ, no. He was referring to Greece which seems to enjoy a 10% deficit.

And the „I“ decided to take its whole housing market off balance sheet.

If that is not enough sexy good news from, yawn, Europe here is:

La Repubblica reports that ECB board member Lorenzo Bini-Smaghi warned of an imminent wave of bank writedowns, because of a rapid expansions in provisions for credit risk. This could lead to a signficant fall in capital ratios. While markets had recently been positive, he said, the ECB remains concerned about the fragility of the banking sector. He is also quoted as saying that any rise in inflation would have immediate and negative consequences on the debt of various euro area member states. (H/T Eurointelligence)

Feliz navidad!

JC Trichet: Eyes wide shut and now QE

It took a while, some prodding, some pushing, but now it is official: JCT goes QE. 60 billion € to be precise. And it lowered interest rates to 1% from 1,25%.

„It’s a significant departure from previous ECB policy,“ Gilles Moec, senior economist at Bank of America – Merrill Lynch, told Bloomberg News.

„But other central banks have been a lot more aggressive.“

JCT is excused, he is French. One funny thing is that the € rises on QE!

Lesenswert

1. Sarko über andere Staatschefs

2. ECB is totally behind the curve
Led by Trichet, the ECB remains to be behind the curve on all things monetary; but there is growing divide among the ECB governors:

Policy makers on the ECB’s 22-member council are divided over the best way to stem the euro region’s worst recession since World War II. Germany’s Axel Weber has ruled out cutting the ECB’s key interest rate below 1 percent and said he doesn’t want to buy debt securities. Greece’s George Provopoulos and Athanasios Orphanides of Cyprus want to keep open the option of deeper rate reductions and asset purchases to fight the risk of deflation.

Trichet said there was no split among the Governing Council. He declined to comment on any possible non-standard measures the bank may decide at its May 7 meeting.

[European EconoMonitor]

Schläft Jean Claude noch immer in Frankfurt?

Das war endlich Aktion. Krasser K. – der deutsche FM, wo ist er überhaupt in letzter Zeit? – Kein Helicopter Benny. Das war/ist Galaxy-mässig: 1,2 Billiarden QE, eh Treasury and Agency buybacks. Amerika führt!

Europa, wie üblich, pennt. Jean Claude Trichet, steht zu vermuten, liegt auf dem Canapé. JC, komm, zeig die Titten. 

Doch es steht nicht zu erwarten, dass JC wild mit dem Zins- und QE-Baguette um sich drischt. Daas isch nischt fraanzöösisch.

Vot is zis French Clouseau smoking?

„We’re approaching a moment where we might have a pickup,“ said European Central Bank president Jean-Claude Trichet, in his most optimistic assessment to date of tentative signs of stabilization in some markets. He cited a modest rebound in corporate bond markets as one positive sign. Mr. Trichet spoke to reporters on behalf of participants in a meeting of central bankers from the world’s leading economies at the Bank for International Settlements in Basel, Switzerland.

Jean Claude stolpert in die 1,5%

Jakso Claude von die EZB geht auf … runter: „Weitere Massnahmen mög … schnarch … lich.“ Wir wissens, JCT. Oh, vorsicht, nicht über das Baguette stolpern.

Dear Jean Claude de la Trichet du Roche-Foucault: Greatings from China

Mon chèr Jean Claude, comment ça va?

China will continue to buy US Treasury bonds, even though it has misgivings about US finances and knows the dollar will depreciate, because it remains the “only option” amid financial turmoil, a senior Chinese banking regulator said Wednesday. Luo Ping, a director-general at the China Banking Regulatory Commission, said in New York that US Treasuries are a “safe haven” for everyone, unlike gold and Japanese and UK government bonds.

(Hat tip Alphaville)

What’s the name of your currency again you are managing, JC?

EZB Letzter bei Behinderten-Olympiade

Je ne comprend. Vat is zis Dutch-Brit prick zinking?

Willem Buiter in einem Post über die EZB in Auszügen:

„Indeed, the Eurozone is now getting so far behind the curve that, if the ECB were on an Olympic race-track, it would be looking itself in the back.

At the ECB, a special branch of voodoo monetary theory has been developed that sees insurmountable problems and dangers associated with getting the official policy rate below some value that is well above the zero floor set by the zero nominal interest on currency.   The exact location of this mysterious liquidity trap lower bound has never been revealed, but on the basis of the stammering, incoherent and incomprenhensible statements in this regard from Jean-Claude Trichet, Jurgen Stark, Gertrude Tumpel-Gugerell, Lorenzo Bini-Smaghi and Ives Mersch  (to name but a few), it appears to be migrating south slowly from around 2.00 percent.

The ECB’s blabbering about a possible liquidity trap above a zero percent nominal interest rate is complete and utter nonsense.  The only floor, if there is one at all, is the zero floor.

The ECB, after being the leader of the pack in fighting the liquidity crunch – it accepted as collateral in its repos and at the discount window anything that did not move and a few things that did – has become the laggard as regards the outright purchasing of private securities (qualitative easing).  It is even reluctant to engage in significant quantitative easing.

There are no obstacles to quantitative easing by the ECB/Eurosystem to be found in the Treaties.  The ECB/Eurosystem is banned from lending directly to national governments and from buying government securities directly in the primary or new issues market, but there is nothing to stop it from purchasing all the govenment securities it wishes in the secondary markets.  All it takes is a decision by the ECB’s Governing Council.“

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EZB JCT High Tech Zinsdeterminator

Die EZB mit Jean le Claude de la Trichet scheut keine Kosten die Zinsen zu bestimmen: JCT EZB Zinsdeterminator 2.0

Dank an Macro Man

JCT sieht (unter)preisliche Risiken

Oh, par bleu. C’est très beunruhigend. Gut, dass Jean Claude es nun auch gesehen hat.

Excerpts: “Current conditions in global financial markets look potentially unstable, suggesting that investors need to prepare themselves for a significant repricing of some assets, Jean-Claude Trichet, president of the European Central Bank, warned at the weekend in Davos. The recent explosion of structured financial products and derivatives had made it more difficult for regulators and investors to judge the current risks in the financial system, Mr Trichet said. We are currently seeing elements in global financial markets which are not necessarily stable, he said, pointing to the low level of rates, spreads and risk premiums as factors that could trigger a repricing.”

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