So there you have it - QE and ZIRP ( Zero interest-rate policy (ZIRP) is a macroeconomic concept describing conditions with a very low nominal interest rate, such as those in contemporary Japan)didn't solve anything, they merely delayed the inevitable and allowed an even bigger bubble to be blown, thus ensuring that the next crash is even bigger than the last one.  Let's hope that Gordon Brown is within ear-shot of the Bat-phone so he can save the world again when the time comes.  I'd love to know what sort of investor buys $131 billion worth of 'junk' bonds, though. Were they addicted to CDOs and other financial WMDs?  Well, bonds are really designed to be bought and held to maturity. The yield of any particular bond will contain a premium for the creditworthiness of the issuer, a term premium dependent on the maturity of the bond (lenders expect to be compensated for locking their money up for longer) and will also encapsulate the markets expectation for the future direction of short term interest rates.  Because the bond price already takes into account the market expectation of movements in short term interest rates, there shouldn't really be any desire to sell when interest rates move up as expected - but investors don't tend to think rationally or act rationally. As the article points out, when rates do start to rise, investors not acting rationally will want to sell bonds or redeem investments in bond funds. In order for them to sell, somebody needs to buy.  Unless you can find another investor happy to buy at the same time somebody wants to sell, the market will work more smoothly if there are liquidity providers happy to bridge that timing gap. Historically, banks tended to be those liquidity providers. They are used to taking on credit risk and can hedge if required. Managing the term premium is not too much of an issue - after all banks always lend long and borrow short, so can manage that risk. Plus they can also manage and hedge the expectations of the future direction of short term rates.  Of course, the liquidity providers expect to be paid for what they do, either by charging a bid/offer or indeed being paid directly by an exchange for committing to make markets. Having sufficient numbers of liquidity providers drives those costs down and also results in a very liquid, sharply priced market for end users.  Now that banks have been discouraged from that role (because it is viewed by some as a 'casino' operation), there is a fear that the market will be less liquid with investors being unable to buy and sell at very tight prices in sizes they need to transact in.

Germans must be mind-numbingly slow on the uptake not to realise what the likes of Schäuble and Merkel meant years ago when they said the "euro must be saved at all costs".

One of them even said (these bots are all the same) the "euro must be saved at all costs or it will be the End of Europe"...from exactly the same botspeak hymn book as mafiosi Borassol's "more Europe or war"...hahahaha...Not a Grexit, or new drachma, but a parallel currency called the Geuro perhaps. Very interesting possibility indeed, giving Greece a competitive tourist trade advantage that the others will want in on for sure. Let us face facts here, Club Med is not changing anytime soon. Cheaper to keep her is the verdict yet again. 2 billion to address the humanitarian crisis on the way, with more new money to be released to fill Greece's empty coffers next week. Draft your proposals quickly Greece. Their trusty EU rubber stamp of approval is at the ready.,,I wonder whether Athens will bother furnishing another list of 'reforms'.

You can just imagine the dialogue round the Syriza cabinet table. Bagsy me! I've got some lovely ideas. We can charge the tourists more for entry to nude beaches. We just need somebody to go round the sunbathers and collect all the cash that they've got in their...Hmmmm, yes, may be a problem that...OK, next: Tax absentee shipowners! We can send all our tax-collectors over to Belize and the Caymans and locate all the shipowners and...

OK, next...'Higher coffee prices for foreigners. The cafetzis just overcharges everyone who looks a bit foreign...Oh I see, they already do...Hm.

Next...'

In southern Spain the Socialist party won a closely-watched regional election in Andalucia, where it has governed since the restoration of Spanish democracy in the 1980s.  But Podemos from the radical left - the Spanish Syriza - won an impressive 15% of the vote; little more than a year after the party was formed.   The big loser in Andalucia was the centre right People's Party, which runs the government in Madrid, even though it came second overall.   The PP will be particularly concerned because the threat to the status quo doesn't come only from the left.  An upstart centrist party, Ciudadanos, also won 9% of the vote, attracting support from people disillusioned by business as usual.   So where does this leave the two main parties in Spain?   As recently as 2008, the Socialists and the PP between them won nearly 84% of the vote in a general election.   They won't come anywhere near that when the country goes to the polls later this year.   Podemos is still some way behind them. But it is indisputably on the rise.  But the FN still came second with more than 25% of the vote, pushing the governing Socialists into third place.   That suggests that support for the FN's anti-immigration, anti-EU message is more than a simple protest vote.  Even if the mainstream parties conspire to keep the FN out wherever they can in the second round of voting, the French elections are another sign that many disgruntled citizens are now ready and willing to look for alternatives.  Elsewhere on the continent there are similar stories.  The rise of the Five Star Movement in Italy or UKIP in the UK, or even the AfD (Alternative for Germany) in Germany, suggest that some political fault lines are moving.  The idea of a 'democratic deficit' has exercised many political minds, particularly among supporters of the European Union.   Parties like Syriza and Podemos want to redefine what the EU does.  But many protest parties want to destroy it.  Of course, the centre ground is not dead.   Well-funded party machines do not disappear overnight (even if supporters of the Greek Socialist party PASOK may beg to differ).   But traditional parties across Europe are under pressure as never before in recent memory.   And European politics has become fascinatingly unpredictable.

Prices have fallen across the eurozone for a fourth month, as economists warn that the currency union could fall into a deflationary spiral.   Official statistics showed that prices fell by 0.1pc in the year to March, a slower pace than the 0.3pc Eurostat reported for the previous month.

No economist polled by Bloomberg expected inflation any higher than zero in the year to March. The most pessimistic analysts predicted that prices would fall by 0.5pc in the period.   Jonathan Loynes, of Capital Economics, said: "The latest data ... do little to diminish the danger of a prolonged period of deflation in the currency union."

"The increase was driven entirely by higher food and energy inflation, no doubt partly reflecting the drop in the euro during the month," he said.  The euro area first entered deflation in December, forcing the European Central Bank (ECB) to deploy a €1.1 trillion (£800bn) bond-buying scheme in a bid to revive the economic area.  Purchases began in March at a monthly rate of €60bn as inflation has remained well below the ECB's target of close to 2pc.  Sandte, of Nordea, said: "For the next few months, we expect the headline [inflation] rate to hover around zero."   "Depending on the monthly changes in energy prices, the headline rate can easily fall back a bit deeper into negative territory," he added. The inflation data came as Eurostat announced that the euro area unemployment rate fell by 0.1 percentage points to 11.3pc in February.

Compared with a year ago the jobless rate fell in 22 of the European Union's member states, and increased in six.

Athens makes another attempt at unlockng funds with reforms-for-cash plan with threat of default looming  - I've also been trying to convince my bank to nullify my mortgage and credit card debts, and all they have done is mess around with the payment period and made me sign bits of paper about how I intend to get out of debt. I desperately need some cash to settle my bar bill at the Dog and Duck and they won't even give me a few quid for that unless I write a list of reforms I am going to make. But, obviously, I can't be arsed to do that.  Went back to the bank again and they asked for that bloody list again. I will told them that I will arrange for some homeless people to sit outside the bank begging and annoying their customers. They ignored my threat and refused to give me any money.

They won't stop asking for a bl0ody list so we finally put one together with things like "Will put €1 in the swear box if any of us swear" and "will sell some old CD's at a car boot sale" and sent it to the bank written in Chinese in yellow ink. But they still refuse to give us any money.

I don't think they realise how desperate the situation is. I've told them that without a bailout we won't be able to pay our bar bill we will be barred from the Dog and Duck. And no-one wants to see that happen, do they?

Hopes of an breakthrough between Greece and its creditors before the Easter break are fading today.  After three days of negotiations over reform plans, Greek officials are heading back from Brussels to Athens without a breakthrough.   European Council president Donald Tusk has predicted that it could take until the end of April for Greece to satisfy its lenders that it has a credible economic program. Until then, the government must struggle on without bailout funding.  Greek officials are remaining upbeat, telling us that sessions took place in a “very good climate”, adding:   “Both sides agreed that the process of fact-finding currently underway in Athens should be intensified.”   But without any new bailout funds, Athens faces a struggle to meet debt repayments including the €450m owed to the IMF on April 9th.     Eurostat reports that unemployment across the euro area fell from 11.4% in January -- having revised up its previous estimate of 11.2%.  Unemployment across the wider EU dipped to 9.8% in February 2015, down from 9.9% in January 2015 and from 10.5% in February 2014.

According to Eurostat, the number of people unemployed in the euro area fell by 49,000 meaning 18.204m were out of work.  And, as usual, the lowest unemployment rates were recorded in Germany (4.8%) and Austria (5.3%), and the highest in Greece (26.0% in December 2014) and Spain (23.2%).

The European Central Bank is set to tighten the noose on Greece a day after the president of the Bank denied the institution was “blackmailing” Athens into agreeing to bail-out conditions.

According to reports, the ECB will move to officially ban Greek banks from increasing their holdings of the country’s short-term sovereign debt, in a bid to break a potentially toxic link between lenders and the stricken sovereign.   The restriction will place a further squeeze on the cash-strapped Greek government, which could run out of money to pay wages and pensions by the end of next month.  Speaking to the European Parliament on Monday, Mario Draghi denied the ECB was acting unfairly towards the Leftist government: “We haven’t created any rule for Greece, rules were in place and they’ve been applied,” said Mr Draghi.   The ECB has emerged as the chief disciplinarian among Greece’s three main creditors.  The central bank has so far rebuffed pleas to increase the issuance of treasury bills or to resume its ordinary lending to the country.  This toughened stance led to criticism from Athens who accuse the institution of “asphyxiating” the country.   In a letter addressed to the German Chancellor and Mr Draghi, Alexis Tsipras warned the Bank’s stance could turn a “small cash flow issue” into a “large problem for Greece and for Europe.”   Athens is also due to request a return of €1.2bn which was erroneously handed to creditors from a European rescue fund, as it races to avoid bankruptcy and make its debt obligations of €450m to the IMF over the next few weeks.   But the ECB’s fresh curb comes as depositors have rushed to withdraw their money from Greek banks. The Greek banks already hold dangerously large amounts of Greek government bonds, completely unjustified given the country's junk bond rating. They can only run this risk because the ECB is underpinning the Greek banks with ELA that is barely papering over their essentially bankrupt condition. The Syriza government is pressurizing the banks to accept further T-bills - having quite nakedly, politically, decapitated the leading bank directors and replaced them with their own quisling henchmen. More T-bills would only accelerate the banks' decline into default.  he ECB is not telling the banks not to hold the Greek T-bills it already has, but having asked them several times and had its requests ignored, is now ordering them explicitly not to buy any new ones. The ECB is the euro's central bank. It can give such an order. he Greek banks are not owned by Syriza. In its political desperation to hang onto power, it is cynically quite prepared to make life even worse for the Greeks just to try to make its polemic point.