Posts Tagged ‘Rates’

2011/09/08: QuickPost: ECB Press Conference: Trichet Gets It Wrong and Right

September 8, 2011 Leave a comment

It was a very animated monthly ECB post-rate decision press conference again today after the central bank left rates unchanged at 1.5%. And that is a a very interesting stance we will discuss further below. Suffice to say for now that Monsieur Trichet was very right on a couple of his views regardless of what his critics might say.

First of all, we maintain our general perspective that the ECB is one of the guys wearing white hats in this whole European sovereign debt crisis. The governments of the successful northern tier states have been talking a good game about the steps to alleviate pressure on the stressed peripheral Euro-zone sovereign debt markets. That goes all the way back to the initial phase of the Greek Sovereign Debt Crisis last May (as in 2010, not this year.) Yet, in fact they have done very little to expand the powers and provide the necessary funding for the European Financial Stability Facility (EFSF), the vehicle set up to stabilize those stressed sovereign debt markets.
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2011/08/10: How We Got Here-IV: Welcome to the Island, Survivor (…we hope)

August 10, 2011 5 comments

Yep, it seems to have all turned into a big game of Survivor… And the two-way stretch from the stress factors is obvious. Getting through this is going to be a test of who can stand the huge amount of cognitive dissonance imposed from the outside. That includes the increasingly tedious and blindingly benighted machinations of the political class and alleged financial luminaries, and the radical, rabid dog reactions it foments in the markets.

It increasingly seems this is going to be a test of endurance, as Ben Bernanke was probably right to indicate that there won’t be much need to raise rates between now and mid-2013. In other words, after his previous soothing views on the economy and markets, the Fed head has thrown in the towel on expecting anything truly positive to develop in the intermediate term. And that’s not just us playing off his perceptions, as we have been great skeptics of the ability to return to an upbeat economic environment in spite of any improvement in equities and risk assets. And neither is it plain old bearish talk. Beyond the fiscal and debt ceiling dilemmas, there is good reason to believe it can’t get better this side of the next US general election.

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