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Trump Praises ECB For “Depreciating The Euro”, Slams The Fed For Doing Nothing
Trump Praises ECB For “Depreciating The Euro”, Slams The Fed For Doing Nothing When discussing the barrage of easing unleashed by the ECB moments ago, we said that as “we prepare for the ECB press conference in 30 minutes, that will be nothing compared to the angry twitter tirade we expect by president Trump who will […]
Draghi Goes All Out: ECB Cuts Rates, Restarts Open-Ended QE, Changes Forward Guidance, Eases TLTRO, Introduces Tiering
Draghi Goes All Out: ECB Cuts Rates, Restarts Open-Ended QE, Changes Forward Guidance, Eases TLTRO, Introduces Tiering With the market worried that Mario Draghi could surprise hawkishly in his parting announcement… … that is how the market initially interpreted today’s ECB press release, which cut already negative deposit rates for the first time since 2016 to […]
Why The Next ECB Stimulus Plan May Fail
Why The Next ECB Stimulus Plan May Fail In June 2014 I wrote an article called Draghi’s Plan does not fix Europe. In that article, I explained that the structural challenges of the eurozone -high government spending, excessive tax wedge, lack of technology leadership and demographics- were not going to be solved by a round of […]
Can the Fed really Control the Economy?
Can the Fed really Control the Economy? QUESTION: This whirligig talk of whether the Fed cuts rates by 25 or 50 basis points is carnival-level absurdity. Does the Fed have the “pretense of knowledge,” as F.A. Hayek, said, that they can regulate the economy like turning up or down the thermostat? I know you don’t agree […]
Signs of recession are hitting Europe. Is its new Central Bank president up for the challenge?
Signs of recession are hitting Europe. Is its new Central Bank president up for the challenge? If new institutional reform is to come to the Eurozone, it will entail a major paradigmatic shift We now know that there will be a changing of the guard at the European Central Bank (ECB) in October. The current […]
End Game
End Game Well, here we are. All roads have led to here. The combustion case outlined in April, the technical target zone outlined in January of 2018. Trade wars, 20% correction in between, Fed capitulation in response, slowing growth data, inverted yield curves, political volatility, deficit and debt expansion, buybacks. All the big themes that have dominated the […]
World’s Central Banks End Pact That Limited Selling Of Gold
World’s Central Banks End Pact That Limited Selling Of Gold In a surprising announcement on Friday morning, the European Central Bank said the 21 signatories of the 4th Central Bank Gold Agreement (CBGA) “no longer see the need for formal agreement” as the market has developed and matured, and as a result the signatories “decided […]
Strait Outta Hormuz
Strait Outta Hormuz The Strait of Hormuz these days seems to be what the streets of Compton used to be in the 90s. Yesterday, Iran’s Revolutionary Guard said it has seized a “foreign vessel” for smuggling fuel. And this morning, news came in that the US has shot down an Iranian drone in the Strait of […]
Lagarde, the ECB and the next crisis
Lagarde, the ECB and the next crisis The appointment of Christine Lagarde as president of the ECB has been greeted with euphoria by financial markets. That reaction in itself should be a warning signal. When risky assets soar in the middle of a huge bubble due to a central bank appointment, the supervising entity should be concerned.Lagarde is […]
Meet the New European Union, Same as the Old One
Meet the New European Union, Same as the Old One The European Union chose new leadership this week. It was, for once, a fraught affair. No rubber stamps were anywhere to be seen. In the end all four of the new European Union leadership were not the frontrunners as put forth by German Chancellor Angela […]
Europe Gives Up On Sound Money, Prepares To Join The Currency War
Europe Gives Up On Sound Money, Prepares To Join The Currency War Not so long ago, Europe seemed to have its financial house more-or-less in order. German government spending was actually falling. Industries that had been nationalized in the socialist 70s were being privatized. The European Central Bank – run by sound money advocate Jean-Claude […]
Global Negative Yielding Debt Hits Record $12.3 Trillion
Global Negative Yielding Debt Hits Record $12.3 Trillion Somewhere, SocGen’s permabearish strategist Albert Edwards is dancing a jig, as every day that passes bring us every closer to his trademark “Ice Age.” One week after the universe of negative yielding debt regained its prior high of $11.7 trillion, overnight – thanks to the dovish capitulations by both the ECB […]
Draghi Punts, Trump Grunts, Gold Bunts
Draghi Punts, Trump Grunts, Gold Bunts For months now the markets have been in denial that ECB President Mario Draghi has any answers to the Euro-zone’s problems. Today’s statement confirms what anyone with eyes to see has been saying. There is no Plan B. Draghi started the year saying he would end his various QE […]
The Great Unknown
The Great Unknown QUESTION: Martin, if Europe and Japan have destroyed their bond markets, would it be a good idea for them to get the government out of the bond market and have short term rates be floating in the free market? The free market would probably help since they don’t know how to move rates […]
Decades of laissez-faire in Europe or the destruction of the middle class
Decades of laissez-faire in Europe or the destruction of the middle class The EU elites pay homage to the laissez-faire of liberalism. They have been deregulating and “liberating” the market for 30 years. The Western governments also follow the philosophy and hardly intervene in the market. There is only one authority that can intervene effectively […]
