Analysis: Endless QE? $6 trillion and counting
LONDON (Reuters) – Many more years of money printing from the world’s big four central banks now looks destined to add to the $6 trillion already created since 2008 and may transform the relationship between the once fiercely-independent banks and governments.
As rich economies sink deeper into a slough of debt after yet another wave of euro financial and banking stress and U.S. hiring hesitancy, everyone is looking back to the U.S. Federal Reserve, European Central Bank, Bank of England and Bank of Japan to stabilize the situation once more.
Endless QE? $6 trillion and counting
LONDON, June 13 (Reuters) – Many more years of money
printing from the world’s big four central banks now looks
destined to add to the $6 trillion already created since 2008
and may transform the relationship between the once
fiercely-independent banks and governments.
As rich economies sink deeper into a slough of debt after
yet another wave of euro financial and banking stress and U.S.
hiring hesitancy, everyone is looking back to the U.S. Federal
Reserve, European Central Bank, Bank of England and Bank of
Japan to stabilise the situation once more.
Barlcays challenges idea Spain EU/IMF program dilutes priv creditor claims, says program (via lower rates etc) may even lift recovery values
@michaelhewson @ReutersJamie what will the “newco” Rangers be called? Strangers?
@RencapMan maybe, but if worst happens in spain/EZ, then where will crude be? And where does that leave a Russian budget banking on $100+pb?
Picking your moment
Watching how the mildly positive market reaction to this weekend’s 100 billion euro Spanish bank bailout evaporated within a morning’s trading, it’s curious to look at the timing of the move and what policymakers thought might happen. On one hand, it showed they’d learned something from the previous three sovereign rescues in Greece, Ireland and Portugal by pre-emptively seeking backstop funds for Spain’s banks rather than waiting for the sovereign to be pushed completely out of bond markets before grudgingly seeking help.
But getting a positive market reaction to any euro bailout just six days before the Greek election of June 17 was always going to be nigh-on impossible. If the problem for private creditors is certainty and visibility, then how on earth was that supposed to happen in a week like this? In view of that, it was surprising there was even 6 hours of upside in the first place. In the end, Spanish and broad market prices remain broadly where they were before the bailout was mooted last Thursday — and that probably makes sense given what’s in the diary for the remainder of the month.
Sobering read for those saying default/deval answer to euro prob. 10yrs on:”Argentine CDS spiral on peso-fication fear” http://t.co/0LHE332I
Cyprus hints at bailout, could come soon http://t.co/BkY22efe via @reuters
@AlenMattich Aug seems likes yrs away! tho series of steps. no “victory” on any one-Spain/Greece/summit etc. Collectively might be different
@AlenMattich well, 6 days at least! as barclays said yday, no l-t creditors likely return in EZ as long as tail-risk of euro exits remains
-
About Mike
-
Follow Mike
