The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[muppet]

Interesting look at what percentage of each country's bond the ECB are likely to hold next year after the latest QE. Why will Germany be much higher than us?

[seafoid]

Interesting look at what percentage of each country's bond the ECB are likely to hold next year after the latest QE. Why will Germany be much higher than us?

The ECB probably focused on banks in trouble who would be more likely to hold German Bonds which are deemed more safe..

[seafoid]

Eurozone inflation for February was minus 0.1%. The markets are so fucked.

[muppet]

http://www.theguardian.com/business/2016/apr/17/central-bank-global-economy-helicopter-money?CMP=share_btn_tw

.....The plan has not worked. There has been little impact on interest rates, banks have not increased their lending and the yen has risen on the foreign exchanges - the opposite of what was planned - because investors fear that the Bank of Japan is fast running out of ammunition. They have a point.

Central banks, of course, swear blind that they are fully in control and that there is nothing to worry about. Perhaps not, but something doesn't smell right. The fact that economists at Deutsche Bank published a helpful cut-out-and-keep guide to helicopter money last week is a straw in the wind.

As the Deutsche research makes clear, the most basic variant of helicopter money involves a central bank creating money so that it can be handed to the finance ministry to spend on tax cuts or higher public spending. There are two differences with QE. The cash goes directly to firms and individuals rather than being channeled through banks, and there is no intention of the central bank ever getting it back.

It will take some time to get the helicopters into the air. Central banks can muddle through for the rest of this year, beefing up their QE programmes and driving interest rates deeper into negative territory. The underlying softness of the global economy, however, means that it is quite easy to envisage a downturn in 2017, the 10th anniversary of the start of the financial crisis.

In those circumstances, the unconventional would quickly become conventional, as it did after the collapse of Lehman Brothers. The only question would be which central bank would move first. Hardline resistance from Germany means it certainly would not be the ECB, although the case for helicopter money in the eurozone is strong.

[seafoid]

Neil Postman had 6  questions about new technology

What is the problem to which this technology is a solution?
Whose problem is it?
What new problems might be created by solving the original problem?
Which people and what institutions will be most seriously harmed by this new technology?
What changes in language are being forced by these new technologies?
What sort of people and institutions gain special economic and political power from this new technology?


The big issue is how much wealth is controlled by the ultra rich. Helicopter money will not address it

[muppet]

The EU is getting ready for the annual kicking the Greek can down the road....

http://www.rte.ie/news/business/2016/0427/784583-greece-bailout/

[seafoid]

The US is unable to generate inflation

http://www.ft.com/cms/s/0/13a15cdc-0af2-11e6-9456-444ab5211a2f.html

"A subdued start to 2016 for the US economy coupled with depressed inflation expectations will probably prompt the Federal Reserve to keep interest rates unchanged this week, as chair Janet Yellen insists on an ultra-cautious approach to normalising monetary policy."

[seafoid]

http://www.theguardian.com/commentisfree/2016/may/09/the-choice-for-europe-rescue-greece-or-create-a-failed-state

[muppet]

http://www.theguardian.com/commentisfree/2016/may/09/the-choice-for-europe-rescue-greece-or-create-a-failed-state

Everyone knows this, even the politicians. But they will keep putting it off, as there are always more important issues in local politics and there is no real leverage from anywhere to force them to sort it out. The can will either keeping getting kicked down the road or it will explode, but it won't get fixed.

[seafoid]

http://www.theguardian.com/commentisfree/2016/may/09/the-choice-for-europe-rescue-greece-or-create-a-failed-state

Everyone knows this, even the politicians. But they will keep putting it off, as there are always more important issues in local politics and there is no real leverage from anywhere to force them to sort it out. The can will either keeping getting kicked down the road or it will explode, but it won't get fixed.

I think debt writeoffs are coming, Muppet.
Hypo alpe is a test case .. and they speak German ....

[muppet]

http://www.theguardian.com/commentisfree/2016/may/09/the-choice-for-europe-rescue-greece-or-create-a-failed-state

Everyone knows this, even the politicians. But they will keep putting it off, as there are always more important issues in local politics and there is no real leverage from anywhere to force them to sort it out. The can will either keeping getting kicked down the road or it will explode, but it won't get fixed.

I think debt writeoffs are coming, Muppet.
Hypo alpe is a test case .. and they speak German ....

Maybe, but only after the crisis leaves no there possibility. Can kicking is still the default (sorry) reaction.

[seafoid]

http://www.theguardian.com/commentisfree/2016/may/09/the-choice-for-europe-rescue-greece-or-create-a-failed-state

Everyone knows this, even the politicians. But they will keep putting it off, as there are always more important issues in local politics and there is no real leverage from anywhere to force them to sort it out. The can will either keeping getting kicked down the road or it will explode, but it won't get fixed.

I think debt writeoffs are coming, Muppet.
Hypo alpe is a test case .. and they speak German ....

Maybe, but only after the crisis leaves no there possibility. Can kicking is still the default (sorry) reaction.

Bet you never through the discussion would be going on 8 years later when you started

[muppet]

http://www.theguardian.com/commentisfree/2016/may/09/the-choice-for-europe-rescue-greece-or-create-a-failed-state

Everyone knows this, even the politicians. But they will keep putting it off, as there are always more important issues in local politics and there is no real leverage from anywhere to force them to sort it out. The can will either keeping getting kicked down the road or it will explode, but it won't get fixed.

I think debt writeoffs are coming, Muppet.
Hypo alpe is a test case .. and they speak German ....

Maybe, but only after the crisis leaves no there possibility. Can kicking is still the default (sorry) reaction.

Bet you never through the discussion would be going on 8 years later when you started

Good question.

I must go back and read what we were thinking back then.

[seafoid]

The German attitude towards debt and morality is insane. The neoliberal model that they have in place and upon which their Eurozone is based has drowned Europe in unpayable debt that has driven interest rates to zero and below. Pandering to debt owners *as in shafting us with Anglo and forcing depositors to pay for the Cypriot banks) has driven the Eurozone into a deflationary hole from which it cannot escape under current policy. Schaueble and co should get a grip.

Italy will blow up next. 

Thomas Palley from 2010 talking about the Yanks but just as relevant to the ECB

http://beforeitsnews.com/economy/2010/12/tom-palley-on-why-obama-is-failing-294076.html

"Only after 2 years in office, when the economy is not recovering from the recession as his advisors told him it would, and the remedies that he throws at it (on their advice) turn out to be more damp squibs that the weapons of mass economic reconstruction he was told they would be, must it slowly be dawning on him that may don't understand the economy.
He's learning the hard way the lesson I and many other critical economists acquired as we studied for our economics degrees–mostly by reacting incredulously to weird propositions that our Professors would use to derive their models–that there is something rotten in the state of economic thinking.
Fortunately, I had time to undertake scholarly research to confirm that initial guttural reaction. Yes, what simply felt like crap to me rather than wisdom, really was crap: the weird propositions that my Professors would put forward were kludges to hide fundamental flaws in the underlying theory. In full view in the academic literature of economics, paper after paper proved that the theory did not hold together."

Now it's 6 years on. the Republican party is in full meltdown mode . Poland, turkey and Hungary have far right governments. The UK is tearing itself apart over Brexit. there is no growth anywhere. Inflation is a fantasy. The US can only produce 160,000 jobs in one month.

[Farrandeelin]

So when will this come to a head? Just wondering.