- Herr Draghi or Signor Draghi, and the ECB’s Santa Rally (technical) – Telegraph Blogs
The ECB’s back-door bail-out for Italy, Spain, Belgium, and… France? …is €489bn. Roughly €300bn of today’s eagerly awaited LTRO tender is recycled old money from earlier support operations. The new money is €200bn. This alone is not going to shore up the sovereign states of southern Europe as they grind deeper into recession/depression.
- After Years Of Patent Litigation, Nuance Acquires Vlingo | TechCrunch
In what Vlingo CEO Dave Grannan calls a ‘good outcome’ on Twitter, the voice-to-text technology company has just been acquired by speech recognition king Nuance. Notably, Nuance has repeatedly sued Vlingo over patent infringement – and tried to acquire them – in the past
- Econbrowser: European financial tensions and the Fed
U.S. monetary policy has gone through three distinct phases since 2008. We may be about to begin the fourth.
- BBC News – Bank of America fined $335m for minority discrimination
Bank of America’s Countrywide Financial business has agreed to pay a record fine of $335m (£214m, 257m euros) to settle discrimination charges. The justice department said Countrywide had "steered" more than 10,000 minority borrowers into sub-prime mortgages, while white borrowers with similar credit profiles received prime loans.
- ECB balance sheet sucked further into the crisis | Gavyn Davies | Insight into macroeconomics and the financial markets from the Financial Times – FT.com
Whatever they may claim to the contrary, the ECB is finding that it has no choice but to use the central bank balance sheet to stabilise the euro crisis. I am not complaining about that. The alternative would have been far, far worse. But we should call a spade a spade. This is quantitative easing on a significant scale, and the lines between this form of QE, and the direct monetisation of budget deficits, which is forbidden by the spirit of the eurozone treaties, are becoming increasingly blurred.
- Greek debt talks hit trouble as hedge fund walks out | Reuters
Talks over restructuring part of Greece’s massive public debt ran into trouble on Tuesday as one fund walked away from negotiations, fuelling growing doubts about whether a deal that is crucial to a new bailout agreement can be reached this year.
- Germans Ponder If Europe Behaves Like Them Would That Backfire – Bloomberg
The risk to Germany, whose exports account for almost half of gross domestic product, is that transforming the region’s struggling nations into blueprints of itself may work too well.
- Chelsea’s Terry to Be Prosecuted Over Alleged Racist Comments About Player – Bloomberg
England soccer captain John Terry will face criminal charges after a police probe into a complaint he racially abused Queens Park Rangers defender Anton Ferdinand during an Oct. 23 Premier League match, prosecutors said today.
- 2011 In Review: Four Hard Truths « iMFdirect – The IMF Blog
First, post the 2008-09 crisis, the world economy is pregnant with multiple equilibria-self-fulfilling outcomes of pessimism or optimism, with major macroeconomic implications. Second, incomplete or partial policy measures can make things worse. Third, financial investors are schizophrenic about fiscal consolidation and growth. Fourth, perception molds reality.
- Mitt Romney’s Ridiculous Comparison of US to Greece – US Business News Blog – CNBC
I’m somewhat sympathetic to the idea that debt can drag down the economy. But there’s no need to start saying crazy things like the U.S. is about to become Italy or Greece if Obama is elected for another term. This simply isn’t in the cards.
- The ECB’s 3-year funding operation: The ECB, eternal and infinite | The Economist
I’m a bit more sympathetic to the ECB’s strategy than I used to be, but still not convinced it will work. Even with the threat of economic collapse at their doorsteps, European leaders still seem incapable of unified, decisive action.
- ECB: Interview with the Financial Times
Interview with Mario Draghi, President of the ECB, conducted by Lionel Barber and Ralph Atkins on 14 December 2011 in Frankfurt
- Macro and Other Market Musings: Bill Gross Forgets About the Natural Interest Rate
What Gross fails to consider is that interest rates would be low now even if there were no Fed. This is because the economy is weak and as a result the natural interest–the interest rate consistent with economic fundamentals–is low. As I constantly tell my students, never draw any conclusions about the stance of monetary policy by looking just at the target policy interest rate.
- Ron Paul’s Shaggy Defense – National – The Atlantic
I think it’s extremely important that the discerning consumer understand that the problem isn’t merely that Ron Paul claims that the newsletters are a bizarre forgery, but that when initially asked about them Paul actually defended the lett
- India’s Sensex Sinks to 28-Month Low as Foreigners Trim Holdings – Bloomberg
"Sustained selling by foreign investors, spurred by weak domestic economic fundamentals, is creating panic," said Deven Choksey, managing director of K.R. Choksey Shares & Securities in Mumbai. "Rupee depreciation and expanding fiscal deficit will put earnings under pressure going forward."
- What Crisis? German Economy Defying European Gloom – SPIEGEL ONLINE – News – International
German companies and consumers are upbeat about the future, according to economic surveys released on Tuesday. They show that Europe’s largest economy has remained resilient in the face of the euro crisis despite expectations that the common currency zone is headed for recession.
- Argentina es uno de los países más proteccionistas del mundo – lanacion.com
Lo dice una nota del Wall Street Journal; hay trabas a 600 productos; iPhone, computadoras Mac, autos BMW y hasta muñecas Barbie, sobresalen en la lista
- Italian Banks Are Said to Use State-Guaranteed Bonds to Receive ECB Loans – Bloomberg
UniCredit SpA (UCG) and Intesa Sanpaolo SpA (ISP) are among Italian banks that used bonds guaranteed by Italy as collateral to obtain loans from the European Central Bank at today’s auction, two people with knowledge of the matter said. Italian banks issued about 40 billion euros ($52 billion) in state-backed bonds, the Italian exchange said in a filing yesterday. UniCredit issued 7.5 billion euros of the bonds and Intesa Sanpaolo created 12 billion euros of notes maturing in March. The bonds were to be used as collateral for the ECB auction, two people familiar with the situation said yesterday.
- European P/E Multiples Lowest Since 1980?s [Charts] | ValueWalk.com
Barclays is out with a really interesting graph of European Cyclically Adjusted P/E (CAPE) Multiples, graph points to multiples lowest since the 1980?s:
- Bonds Stop Flowing as Collateral Gets Stuck at ECB: Euro Credit – Bloomberg
The chains of loaned securities being pledged and re-pledged in the so-called wholesale money markets are growing shorter, as collateral piles up at central banks where it can’t generate additional borrowing.
Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.