Speaker Boehner Says Country On Path To Defaulting On Debt

By: Monday October 7, 2013 6:55 am

Speaker John Boehner said in an interview with ABC News on Sunday that the United States government is on the path to defaulting on its debt .

 

Berlusconi’s Return Roils Italian Markets

By: Monday December 10, 2012 12:40 pm

Markets in Italy are freaking out today, mainly because of the pronouncement of one man, Silvio Berlusconi. The former Prime Minister plans to run for office yet another time, and Mario Monti, the current caretaker leader, has resigned, setting up new elections probably in February.

Big Banks Increasing Spread on Mortgage Profits, Not Funneling Cheaper Rates to Customers

By: Wednesday September 19, 2012 9:33 am

Banks are making more off mortgages than ever before, refusing to pass on lowered interest rates from federal policy, including the purchase of trillions in mortgage-backed securities by the Federal Reserve, to consumers. This isn’t really the enigma that the New York Times’ Dealbook makes it out to be. It’s simple collusion. Nobody offers 2.8% mortgage rates, so nobody gets them. As a result, the spread that banks capture on their mortgages widens.

German Court Approves European Bailout Fund

By: Wednesday September 12, 2012 8:00 am

A German constitutional court has allowed the new European bailout fund, the European Stability Mechanism (ESM), to go forward, with only one condition that appears surmountable.

European Central Bank Announces Conditional Bond Purchase Scheme

By: Thursday September 6, 2012 9:55 am

European Central Bank President Mario Draghi wrapped up his major press conference this morning, and the news was pretty much what we heard yesterday. Draghi announced the formation of the OMT, or Outright Monetary Transactions. It’s an unlimited sovereign debt purchase scheme for those countries which submit to giving the ECB a vote on their fiscal policies.

ECB’s Draghi Hints at Purchases of Sovereign Debt; Is Just Saying So Enough?

By: Tuesday September 4, 2012 10:40 am

Yesterday I noted what a consequential week this would be for the European economy, as the European Central Bank prepared to make its decision on how to deal with soaring bond yields in Italy and Spain. ECB President Mario Draghi let some of the cat out of the bag yesterday, hinting that the central bank would purchase short-dated sovereign debt instruments from those nations. Just hinting at this is already affecting markets.

ECB Prepares to Reveal Its Decision on Eurozone Rescue

By: Monday September 3, 2012 11:00 am

We have another week where the speeches at a national convention won’t be the most important in the context of the world economy. The European Central Bank meets this week amid high expectations that they will take action to finally arrest the unusually large bond price spikes from troubled Eurozone sovereigns like Spain and Italy. Shares in European stock markets drifted higher in anticipation of the announcement of a program to purchase bond debt from those countries and push the yields lower. However, that may not be part of the initial announcement this week

The Worst Idea in the World: Securitizing Rental Revenue

By: Sunday August 26, 2012 1:00 pm

The last financial crisis can be blamed in large part on runaway securitization. Wall Street giants sliced and diced mortgage loans into bonds that they sold around the world. They claimed that they diversified the mortgage pools so that even a few defaults would not undermine the value of the securities, and they offered tranches of the bonds at a decent yield. As global demand increased for the securities, Wall Street pressured originators to close more and more loans, regardless of creditworthiness. This caused a bubble in prices. Moreover, financial innovators took the lower-tranche loans and cut them up into once-removed securities, making bets on bets on the housing market that were allegedly “safe”. We all know how this ended, and how the securitization bubble took a crash in housing prices and made it exponentially worse.

So now we’re poised to do that all over again.

ECB Bond-Buying Proposal Confirmed By Second Media Outlet

By: Tuesday August 21, 2012 10:00 am

The European Central Bank spent most of yesterday rejecting any hope of an imminent intervention in the European bond markets, to put a cap on the spread between the yields of the cheapest and most expensive sovereign bonds. But Ambrose Evans-Pritchard of the Telegraph (UK) not only confirmed the existence of the program, but said Germany would get behind it.

European Central Bank Floats and then Denies Mass Bond-Buying Scheme

By: Monday August 20, 2012 9:25 am

According to the German magazine Der Spiegel, the European Central Bank has floated a scheme to set limits on bond yields for sovereign debt among member nations in the Eurozone, essentially through a mass bond-buying program. But the ECB quickly put out something like a denial.

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