Spanish banks 1, Spanish mortgages 0

April 24, 2012

The trillion euros lent out by the European Central Bank for three years at a rock bottom interest rates were supposed to do two things –  throw a comfort blanket around Europe’s wobbly banks and pump money into  moribund economies. Some new data from struggling Spain confirms that while there may be a bit of a case for the former, the latter is still falling short.

Roubini takes on the ECB

April 23, 2012

It was fun to watch. Nouriel Roubini, NYU economist and crisis personality, was one of just five carefully selected individuals at a large gathering in the International Monetary Fund HQ1 building’s towering atrium who actually got to ask questions of the policymakers on stage.

A curate’s egg — good in parts

By Mike Peacock
April 23, 2012

An action-packed weekend with both good and bad news for the euro zone, which may — net — leave its prospects little clearer.

The dangers of a bloated ECB balance sheet

April 20, 2012

Central balance sheets across the industrialized world have increased rapidly in response to the financial crisis, as recently noted on this blog. In Europe, the balance sheet of the ECB and the 17 national central banks that share the euro currency has grown to around 3 trillion euros after the ECB injected more than a trillion into the market in 3-year loans and loosened its collateral standards.

The pain in Spain – redux

By Mike Peacock
April 17, 2012

Spain’s borrowing costs are likely to soar at an auction of 12- and 18-month T-bills after its 10-year yields were pushed through the totemic 6 percent level on Monday. The history of the euro zone debt crisis shows that once above 6 percent the spiral accelerates and before you know it you’re at 7 percent – the level generally seen as unsustainable for state financing.

The going gets tougher for Italy and Spain

April 12, 2012

One trillion euros is a lot of money. And as we have previously noted on this blog it did a lot for stock markets early this year but not much for the real economy.

Italy up for auction

By Mike Peacock
April 12, 2012

All eyes on Italy. After paying sharply higher yields to sell one-year paper on Wednesday, it faces the altogether trickier task of selling up to five billion euros of three-year bonds. Yields are expected to jump by a full percentage point from a month ago but, as with yesterday, demand will be there and the paper should get away.

What have a trillion euros done for the economic outlook? Not much yet

April 11, 2012

The trillion euro sugar rush that made Q1 the best start to the year for global stocks in more than a decade has already worn off, but what is most striking is not how quickly it ended. It’s how little the economic outlook has changed.

The pain in Spain falls mainly on…

By Mike Peacock
April 11, 2012

Spanish 10-year bond yields are within a whisker of breaking above six percent for the first time since December and are dragging Italy’s up with them. The balmy days of first quarter calm are well and truly over. “Markets step up the attack”, El Pais blares from its front page this morning.

Who’d be a central banker?

By Mike Peacock
March 28, 2012

The focus is already on the euro zone finance ministers meeting in Copenhagen, starting on Friday, which is likely to agree to some form of extra funds for the currency bloc’s future bailout fund. What they come up with will go a long way to determining whether markets scent any faltering commitment on the part of Europe’s leaders.