{"id":34419,"date":"2018-05-21T14:08:03","date_gmt":"2018-05-21T19:08:03","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34419"},"modified":"2018-05-21T14:08:22","modified_gmt":"2018-05-21T19:08:22","slug":"34419","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34419","title":{"rendered":"Debt Deflation Italian Style"},"content":{"rendered":"
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Debt Deflation Italian Style<\/strong><\/a><\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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New York \u2013 This week The IRA<\/a> will be at the MBA Secondary Market Conference & Expo<\/a>, as always held at the Marriott Marquis in Times Square.\u00a0 The 8th floor reception and bar is where folks generally hang out.\u00a0 Attendees should not miss the panel on mortgage servicing rights at 3:00 PM Monday.\u00a0 We\u2019ll give our impressions of this important conference in the next edition of The Institutional Risk Analyst.<\/p>\n

Three takeaways from our meetings last week in Paris:\u00a0 First, we heard Banque de France Governor Villeroy de Galhau confirm that the European Central Bank intends to continue reinvesting its portfolio of securities indefinitely.\u00a0 This means continued low interest rates in Europe and, significantly, increasing monetary policy divergence between the EU\u00a0and the US.<\/p>\n

Second and following from the first point, the banking system in Europe remains extremely fragile, this despite happy talk from various bankers we met during the trip.\u00a0 The fact of sustained quantitative easing by the ECB, however, is a tacit admission that the state must continue to tax savings in order to transfer value to debtors such as banks.\u00a0 Overall, the ECB clearly does not believe that economic growth has reached sufficiently robust levels such that extraordinary policy steps should end.<\/p>\n

Italian banks, for example, admit to bad loans equal to 14.5 percent of total loans. Double that number to capture the economic reality under so-called international accounting rules. \u00a0Italian banks have packaged and securitized non-performing loans (NPLs) to sell them to investors, supported by Italian government guarantees on senior tranches. These NPL deals are said to be popular with foreign hedge funds, yet this explicit state bailout of the banks illustrates the core fiscal problem facing Italy.<\/p>\n

And third, the fact of agreement between the opposition parties in Italy means that the days of the Eurozone as we know it today may be numbered.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Debt Deflation Italian Style New York \u2013 This week The IRA will be at the MBA Secondary Market Conference & Expo, as always held at the Marriott Marquis in Times Square.\u00a0 The 8th floor reception and bar is where folks generally hang out.\u00a0 Attendees should not miss the panel on mortgage servicing rights at 3:00 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,202,233,282,303,426,431,1464,534,16244,3650],"class_list":["post-34419","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-deflation","tag-ecb","tag-european-central-bank","tag-fed","tag-inflation","tag-interest-rates","tag-italy","tag-monetary-policy","tag-r-christopher-whalen","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34419"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34419\/revisions"}],"predecessor-version":[{"id":34421,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34419\/revisions\/34421"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}