Monti is growing on me ..... He certainly plays a clever game - hitting the Germans with the dreaded inflation card. Why can't the smaller countries like Greece and Portugal find someone to fight their corner? Looks like we just have to hold on tight and hope that some crumbs from any Spanish/Italian gains will fall our way. That or revolution. Can't be much longer coming. Fresh wave of pay cuts and tax demands on its way and the weather's getting cooler...While Monti is keen to push down Italy's borrowing costs, Merkel is more concerned about reshaping the fundamental framework of the eurozone. That's certainly connected, isn't it. Merkel and the German ECB council member Asmussen already said that they both support the bond buying program. Weidmann will remain opposed and nobody will care as he's always been an idiot (scholar of the preceding idiot: Axel Weber). However, in the long term there must be a new framework. It will be crucial to get support for this, keep the process going and find the right moment to get the European people involved....WELL, i don't get this one bit. Where's this inflation coming from? Because the only place i can see it coming from is a weaker Euro due to unlimited money printing by the ECB to support the basket cases of Italy, Spain, Greece et al. It's just a vacuous comment.
Whether they do it by using the ESM to buy primary debt, or another SMP, it's just prining. I think Monti is trying to be too clever & will just paint himself into a corner.
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Morgan Stanley said there are signs of incipient capital flight from China. The yuan has fallen almost 1pc since April, and off-shore markets are pricing in further falls over the next year. The risk for Europe is that China could become a net seller of European bonds if forced to run down reserves to shore up the yuan.
Germany has reasons of its own for going easy on Club Med austerity. The policy has finally begun to boomerang, with German exports falling by 14pc to Spain and 8pc to Italy.
David Owen from Jefferies Fixed Income said Germany's IFO business climate index has fallen to levels that normally mean recession. "Germany is not falling off a cliff but the confidence numbers are as bad as the UK. We see a high risk of contraction this quarter and next," he said.
Professor Lars Feld from Freiburg, one of Germany's five "Wise Men", warned today that euro break-up had become a "relatively large risk" and rebuked hard-line German politicians for "populist outbursts" over recent days.
He said an ejection of Greece from EMU would set of a "domino effect" through the EMU periphery, slicing up to 10pc off German GDP. "The markets would promptly ask whether Spain can make it in monetary union."
china is worried that the jobs the bankers shipped off to them for a quick buck will disappear.
however the west, which as been shafted by bankers doesn't have an economy any more as it's all been shipped off to china for a bankers bonus.
so they dont have anyone to sell to, hence the terror.
aren't bankers wonderful, far sighted people...
china is worried that the jobs the bankers shipped off to them for a quick buck will disappear.
however the west, which as been shafted by bankers doesn't have an economy any more as it's all been shipped off to china for a bankers bonus.
so they dont have anyone to sell to, hence the terror.
aren't bankers wonderful, far sighted people...
François Hollande has now offered support to Mario Draghi's plan to intervene in the bond markets to drive down Spain and Italy's borrowing costs.
He told the press conference in Madrid (see 14.03pm onwards) that wide sovereign debt spreads (ie, the difference between Spain's bond yields and Germany's), can be a "justification for ECB intervention".
(not, though, Draghi has to worry about France's support for a bond-buying splurge)
Hollande also said it was sensible of Mariano Rajoy to hold off asking for aid until he knows what terms it would be offered at (this is the 'conditionality' issue - the fiscal consolidation and structural reform that governments would have to agree to before Draghi deployed the ECB's balance sheet).
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