tag:blogger.com,1999:blog-36227136.post2271259288822860010..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: Draghi getting ahead of himself: are we really seeing a “normal situation” in eurozone financial markets?OEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-36227136.post-35423644308704301802013-01-15T00:01:08.065+00:002013-01-15T00:01:08.065+00:00Draghi has defused the day-to-day crosis but at ex...Draghi has defused the day-to-day crosis but at expense of the 27 mn unemployed wrecked lives in the worsening double-dip recession in the eurozobe. The depression is not quite as severe as in the 1930s which led to Naziism and Fascism but it has lasted longer and is deepening. <br /><br /> It is not just the mediterranean countries either. "Severe material deprivation" has surged in Latvia to 31% and 44% in Bulgaria. There is no hope for these people in their own countries but there's nowhere for them to go. An explosion is inevitable and nobody will then be immune. <br /> christina speightnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-72841387901210726792013-01-14T17:14:07.886+00:002013-01-14T17:14:07.886+00:00I've been wondering for some time what halluci...I've been wondering for some time what hallucigenic substance produces such utterly wonderful visions. christina speightnoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-63168907003334091362013-01-14T12:30:00.087+00:002013-01-14T12:30:00.087+00:00are we really seeing a “normal situation” in euroz...are we really seeing a “normal situation” in eurozone financial markets? <br />Only 'normal' in EU terms, in cloud cuckoo land.Rollohttps://www.blogger.com/profile/18255460090580758354noreply@blogger.comtag:blogger.com,1999:blog-36227136.post-23734763381825804072013-01-12T11:23:09.964+00:002013-01-12T11:23:09.964+00:00If professional investors will not lend to a bank ...If professional investors will not lend to a bank for a brief period of time then there is a liquidity crisis. <br /><br />What we're seeing now does look like something we will be seeing for the foreseeable future. So it might credibly be called the new normal.<br /><br />If the ECB believes this is the new normal, then the ECB believes that the situation is not a liquidity crisis and therefore it must be an insolvency crisis.<br /><br />This raises the question if the EBA is really needed?<br />Banks are reluctant to lend to each other and the worst run banks are the most reliant on the ECB for liquidity. If the ECB were to refuse such a bank access to the discount window then that bank would be effectively shut down. In other words, the ECB does have the power to regulate the banks in the periphery.<br /><br />ECB, centralised organisation with national offices monitoring/regulating banks.<br />EBA, proposed to be a centralised organisation with national offices monitoring/regulating banks.<br /><br />I don't see much of a difference, and I doubt that the EBA will be doing much more than employing people at high wages. & some eurocrat will use the EBA as some sort of justification for further funding to the centralised, constantly failing audits, EU administration. Auditors can't produce clean accounts for themselves but we're supposed to believe that they can (and will) audit others correctly?Jespernoreply@blogger.comtag:blogger.com,1999:blog-36227136.post-52502233180078999772013-01-12T09:05:41.291+00:002013-01-12T09:05:41.291+00:00A bit of hogwash from Draghi I am afraid. he let h...A bit of hogwash from Draghi I am afraid. he let himself been pulled more and more into politics. Probably not the wisest thing to do. Long term bad for his credibility.<br /><br />Re the economy. Difficult to see where the growth should come from, non of the 3 parties (government, business, consumers) are likely to increase spending. Sooner the other way around.<br /><br />Banks look to get more and more unhealthy look at intra bank lending goes much faster down than banks' BSs.<br /><br />Even looking at France. You see mainly investors with a choice going out (at least nett). But yields donot increase. Only explanation is that the arm-twisted/doubling down brigade is stepping in. Same we have seen and see in Spain. Making unhealthy sectors even more unhealthy.<br /><br />Also the markets simply see it as hogwash (and that could and should have been expected), hard to see why he did it, other than for political reasons. <br /><br />Problem being that the markets probably see the ECB still as a more credible (fiancially sound) institution than that it really is. While it upholds the whole system at the moment. Basically when the North starts to walk, it is as good for its money as Robert Mugabe and there is a considerable possibility that somewhere on the rescue proces this will happen. He should simply, now that this is not an issue (yet?), not play with his credibility. As the fear of problems is often as bad as the problem itself in the financial amrket.<br /><br />And as you say as important is the fact that it looks like structural reforms-off time again. Hardly helpful. Riknoreply@blogger.com