ECB, ELA & Cyprus
Following up on yesterday’s post about ECB interventions, I had noted the ELA accounting under the line item “Other Claims on Euro Area Credit Institutions Denominated in Euros”. For the most part, ELA usage has dropped since December 19, 2012, when the ECB reinstated Greek debt as eligible collateral for financing programs. The ELA was supposed .. read more
How Far Did Draghi Go To ‘Save’ The Euro?
Getting into the arcane accounting of central banks is a chore, but, in an uncertain world with every central bank “doing something” at exactly the same time, it is a vital task that requires patience. A lot of patience. Central banks all have familiar financial disclosures and statements. The Fed, ECB, SNB, Bank of England, .. read more
We’re All Monetarists Now
Japan last week announced a radical plan to finally slay the deflation dragon that has stalked their economy for the last 25 years. The sheer magnitude of the BOJ’s program should put to rest once and for all whether monetary policy can truly work as the growth tonic that policy wonks such as Ben Bernanke .. read more
Tactical Update
The great thing about leverage is that, while it works, it is very profitable and it feels really good. The bad thing about leverage is that, when it doesn’t work, it can bankrupt you quickly and it feels very bad. This boom/bust scenario manifested itself in the housing market. I’m fairly convinced that, given the .. read more
Where Has All The Okun Gone?
Headline employment figures had been displaying a far better indication of the labor market than most of the internal, non-adjusted numbers for January and February. Unfortunately, in March the headline finally converged with disappointing internals rather than the other way around. In the Establishment Survey, the headline increase of 88k was far below expectations, and .. read more
A Reversal Of (Mis)Fortunes
In the bank meltdown of 2011, the financial sector was in obvious and blatant distress much to the obvious and blatant consternation of every central banker in the modern economic “community”. By September 2011, the US Federal Reserve re-opened (a second time) dollar swaps with the ECB to pass US $ funding on to local .. read more
Is Two Months the End of the Cycle?
The ISM Manufacturing reports for January and February 2013 looked to be showing a noticeable rebound in manufacturing activity after some rather dicey months in the second half of 2012. I posited that this rebound was largely inconsistent with broader data (notably durable goods and factory orders) and explained them in the context of a .. read more
Some Things Change, Some Things Don’t
If you have followed my blogs before you know I am a big advocate of the efficient markets hypothesis. This a term coined by Eugene Fama back in 1965 and probably made famous by Princeton Professor Burton Malkiel in his widely read book “A Random Walk Down Wall Street” originally published in 1973. This book .. read more
