Oh, I Believe In Miracles…….. -Edward Hugh (Don’t Shoot the Messenger) Never was a truer word spoken, even in jest. When Mario Draghi clarified for the journalists who assembled before him at last week’s ECB press conference what the expression “The euro is irreversible” actually meant, he replied it “means we are not going back … Read more
Today Eurostat released its June estimate of real retail sales for the Euro area. On a month/month basis, real retail sales increased at a rate of 0.1%. However, on a trended basis, the 3-month/3-month average growth rate was down 0.7% in the three months ending in June. Given that the 3-month trended pace of contraction quickened … Read more
This week’s policy and communication failures of ECB President Mario Draghi border on epic. It would almost be funny if it wasn’t so sad, not just for the ECB, but for the ever-increasing number of unemployed in the Eurozone. Teetering on the abyss with record high unemployment putting the lie to his claims about the strength … Read more
Mario Draghi cautioned on the ‘hampered’ transmission channel of monetary policy in his now famous London speech last week: To the extent that the size of these sovereign premia hampers the functioning of the monetary policy transmission channel, they come within our mandate. I referred to the clogging of rates policy back in April via … Read more
This is a guest post by Stephanie Leutert, a research associate here at the Council on Foreign Relations who works with me in the Latin America program. Venezuelan President Hugo Chávez has been in full campaign mode: speaking, singing, and exhorting the dangers of his opponent, Henrique Capríles Radonski. Despite his visible public activities, rumors … Read more
The Fed’s meeting again, and many expect another round of Quantitative Easing. People talk about a Big Bazooka, but the Fed keeps shooting blanks. No matter what it does, it won’t matter much. There’s so much confusion about interest rate determination and effects of rates on the economy. Let me quickly discuss several seemingly unrelated … Read more
Mostly quiet on the Euro front today, but there are some bits and pieces worth chewing over. To recap, ECB President Mario Draghi raised expectations that a big plan was in the works to save the Euro. In short, Draghi’s commitment to do everything necessary to save the Euro was interpretted to mean that the … Read more
The Bureau of Economic Analysis reported Friday that U.S. real GDP grew at an anemic 1.5% annual rate during the second quarter. When the same bad thing keeps happening to you again and again, “disappointed” no longer seems the appropriate word to use. Lower spending by state and local government and lower net exports each … Read more
The latest data from the Bureau of Economic Analysis show real GDP growth slowing to a 1.5 percent annual rate in Q2, down from 2 percent (revised) in Q1. That pathetic figure looked almost good to many observers who expected even worse. However, the more worrisome, although less noticed, number was the slowdown of nominal … Read more
Spain, Italy and Greece have each come under renewed market pressure in recent times. Portugal’s economic contraction is deepening. Multiple financial crises could potentially occur simultaneously, complicating economic management within the Eurozone. It cannot but be clear to all that in many of the periphery countries public debt, which is already excessive, is set to … Read more