In short : European leaders have been criticized for failing to take meaningful action to address the region's debt crisis. However, the European Central Bank’s decision to lend to banks is being applauded by many who had predicted doom, including euro bear Carl Weinberg, chief economist at High Frequency Economics. Weinberg consistently warned that the sovereign debt woes facing Europe would lead to a banking crisis and depression, CNBC reported. But following Wednesday's long term refinancing operation by the European Central Bank (ECB), Weinberg believes the eurozone and its banking industry finally have something to celebrate. Yahoo’s The Daily Ticker reported that the ECB kicked off its new borrowing facility with a bang Wednesday, lending $645 billion to 523 banks at 1 percent for up to 3 years. Both the dollar volume of loans and the number of banks seeking funds exceeded expectations. According to Bloomberg, the banks borrowed enough cash to refinance almost two-thirds of the debt they have maturing next year amid concerns that markets will remain frozen. This may not be enough in the end, but it is a significant step in the right direction, he added. The injection of liquidity converted bear into an optimist. And, according to Forbes.com, the news gave European stocks, especially financials, and the euro a boost. But not everyone agrees that it is time to break out the champagne. Skeptics said the high level of demand for loans is a sign of how desperate European banks are for financing, says the Daily Ticker.There is much excitement in Financial circles at reports coming in from NORAD. First reports indicte that Father Christmas is closing in on planet earth with an unusually large sack. Rumpy von Lickspittle ( the much derided EU stooge) confidently predicts that santa is bringing a couple of Billion Euros to bung at indebted countries in the EU. Rumpy has gone on the record as saying that a policy of relying on Father Christmas was a darn sight more credible than any other policy the EU has yet formulated!!
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MOSCOW -- Russia's central bank unexpectedly cut its refinancing rate, while increasing its repurchase agreement and deposit rates, each by 25 basis points, at its monthly policy meeting Friday.
Market analysts hadn't forecast any rate changes.
The deposit rate and repo rate will now stand at 4.00% and 5.25%, respectively. The refinancing rate is now 8.00%.
The regulator said it would monitor the effect of outside risks and the rise in market rates.
The annual rate of inflation stood at 6.4% as of Dec. 19, the central bank said
"Europeans have taken some steps, but it is belated and incremental," said Flaherty, the longest-serving finance minister among the Group of Seven industrialized countries. "This is not a good picture."
He added euro-zone leaders have been inconsistent in their messaging, by stating that they want to keep the euro area together but at the same time indicating they are unwilling to use taxpayers' cash to bail out weaker peripheral countries.
"You can't have it both ways, so something has to give, and it has not given yet," Flaherty said. "I think ultimately the large euro-zone countries will have to make an important decision. Are they going to save the euro zone or not? And, if they are, then they have to recapitalize their banks, and they are going to have to use taxpayers' money."
Flaherty has repeatedly said that the euro zone has the financial wherewithal to address its sovereign-debt crisis, which has seen yields on heavily indebted countries surge, and sparked widespread concern about the health of European financial institutions.
However, he said in his interview that, in speaking with Group of 20 peers, there may be some desire on Canada's part to provide financial support to Europe.
"If at the end of the day we have to provide some help, somehow, then we would not turn a blind eye to it because of the world consequences of a collapse in the euro zone," Flaherty said.
Euro-zone finance ministers have confirmed plans to contribute EUR150 billion in additional bilateral loans to the International Monetary Fund as part of a move to boost its resources for crisis response. Flaherty said that it would take at least EUR1 trillion to solve the crisis.
Meanwhile, the finance minister said the Conservative government is prepared to be flexible if economic conditions deteriorate, noting there is room in terms of fiscal policy. He added the Bank of Canada likely has room to cut rates if it believed it was necessary.
But for now, Flaherty said his intent is to follow through on his government's plan to try to get to a balanced budget by mid-decade, through an austerity plan that's eyeing annual spending cuts of C$4 billion (US$3.9 billion). This is an attempt, he said, to establish a sustainable fiscal path for Canada for the rest of this decade
Outgoing European Central Bank official Juergen Stark has said the bank's decision to buy government bonds was the final push for his decision to resign.
He told Germany's Die Welt newspaper that the controversial purchases were one of the developments that convinced him the eurozone "was on the wrong track".
Russia cuts interest rates for first time since June 2010. The central bank said its cut of 25 basis points to 8pc was "based on the assessment of inflationary risks and risks to stable economic growth, including those caused by uncertainty over the foreign economic situation".
The Brussels Broadcasting Corporation didn't get it wrong they were just pushing their Anti British pro Europe policy, slag the UK off and praise Brussels for their good plans. If the Chancellor wants a New Years resolution he can scrap the licence fee remove the BBC's charter and make them pay their own way in full, they put advertising on their web site may as well go the whole hog
Well I suppose if the markets the Asian basin relies on to exports its goods to are in recession/heading for depression, it stands to reason their sales will fall and so effect their economy.
What a pity politicians don't take this into account when they think they are 'god' and start gerrymandering whilst jostling for the 'top place'...
Asian markets have risen overnight, following the better-than-expected US jobs data which drove Wall Street higher yesterday. London is forecast to follow this morning and the FTSE 100 is expected to open up 33 points.
We’ll have all the latest on the markets and Europe – including French Q3 GDP figures – on our debt crisis live blog.
It's a half day, for the few traders and brokers who make it in today with the London Stock Exchange due to close at 12.30pm, although there is little Christmas cheer on the other side of the Atlantic where there is a full days trading ahead.
There is more bad news for shareholders in Blacks Leisure . The retailer has announced this morning that talks continue with potential bidders, but it is unlikely that any value will be attributable to shareholders.
Mark Byrne appears to have walked away from his controversial deal to acquire a stake in beleaguered Omega Insurance. He is announced this morning that "negotiations and discussions" have been terminated.
On the economics front the focus will be on US personal income data, which is forecast to rise.
Finally, Happy Christmas . Here's hoping that 2012 will be a lot more prosperous than 2011 – although like this year it may just be about survival. We're taking a brief break, but we'll be back in your inbox bright and early on January 3rd.
The Euro has been declining steadily since the top near 1.50 USD a few months ago. It is now down to 1.30 USD and it looks like sentiment is now very negative — rightly so, but in the markets you have to forecast what will happen next, and nothing goes straight into the whole.
As you know I have been short this bastard-currency since that time, although I've substantially reduced my short exposure now.
It might be about time to close the remainder and wait for yet another bounce.
The reason why I am hesitating is that the end of the year and the bank holidays that go with it might bring the final collapse of Greece and their exit from the Euro, and other not so great but inevitable outcomes for the Eurozone....
What do you guys think? Anyone dares to share not only an opinion, but also concrete market positions?
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