In Praise of Political Dysfunction

The lamentable state of American political parties has become common sport amongst the chattering classes in DC and beyond. Although, one wonders whether this dysfunction has really been such a bad thing, when considering how united bipartisan “responsible” action always seems to result in yet more budget cuts. By virtue of the fact that Congress […]

‘Whatever it Takes’ – How Far is the ECB Really Prepared to go to Save the Euro?

Re-reading Mr Draghi’s market-moving remarks last Thursday, one gains a sense that the European Central Bank chief recognizes that the ECB has a banking run on their hand. Most market participants have understandably focused on Mr Draghi’s pledge that the ECB was “ready to do whatever it takes” to preserve the single currency. “Believe me, […]

Geithner Lets the Cat Out of the Bag

Michael Kinsley once defined a gaffe as “when a politician tells the truth – some obvious truth he isn’t supposed to say.”  On that basis, the recent headline that just popped up might well represent a major gaffe of the Kinsley variety by Treasury Secretary Tim Geithner: *GEITHNER SAYS EUROPE CAN’T BE LEFT HANGING ON THE EDGE OF ABYSS […]

The Growing Pain in Spain

Just when you think that things can get no worse in Spain, they do. Take a look at this chart, courtesy of Credit Suisse via FT’s Alphaville http://ftalphaville.ft.com/blog/2012/07/11/1080121/just-another-scary-spanish-capital-flight-chart/#comments Yiagos Alexopoulos at Credit Suisse estimates that Spanish capital outflows are currently running at an annualised rate of 50 per cent of GDP. No question, the bank […]

Greece and the Rest of the Eurozone Remain on the Road to Hell

So for the short term, it appears we won’t have a “Grexit”, which has led many commentators to suggest (laughably) that a crisis has been averted. Typical of this sentiment is a headline in Bloomberg today  “Greece avoids chaos; Big Hurdles Loom”. To paraphrase Pete Townsend, meet the new chaos, same as the old chaos. […]

Germany’s Constitutional Conundrum

Hans-Werner Sinn, President of Germany’s Ifo Institute and the Director of the Center for Economic Studies at the University of Munich, has taken to the pages of the NY Times to explain why Berlin is balking on a further bailout for Europe. Amongst the points that Sinn makes against German sharing in the debt of […]

Today Germany Is the Big Loser, Not Greece

Given the German electorate’s long standing aversion to “fiscal profligacy” and soft currency economics (said to lead inexorably to Weimar style hyperinflation), one wonders why on earth Germany actually acceded to a “big and broad” European Monetary Union which included countries such as Greece, Portugal, Spain and Italy. Clearly, this can be better understood by […]

Spain Is the New Greece

Nearly one Spaniard in four is unemployed, according to data released on Friday, as the country’s economic and financial predicament prompted a government minister to talk of a “crisis of enormous proportions”.The data from the National Statistics Institute showed 367,000 people lost their jobs in the first three months of the year. At this pace, […]

America Needs Healthcare, Not Health Insurance

In Friday’s New York Times, Paul Krugman argues that the Supreme Court conservatives grasping for reasons why Congress lacks the power to do anything that they don’t like have forgotten an important distinction: the one between a judge and a politician. We’re not sure this is correct. It’s always been the case that for all […]

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