Germany’s top judges may be presenting us with the intriguing case of a safe asset (German bunds) that suddenly looses central bank support.
No dull crisis in Eurozone. ft.com/content/bfe02c… via @financialtimes
No dull crisis in Eurozone. ft.com/content/bfe02c… via @financialtimes
equally shocking, there are 1750 German economists (and some lawyers) who either
1. havent read monetary theory in a good while.
2. have read monetary theory and are playing political games.
1. havent read monetary theory in a good while.
2. have read monetary theory and are playing political games.
if 1, that Milton Friedman bible needs to be closed.
Milton's disciples! start with @BCoeure speech on sovereign debt. That complicates a bit the 'monetary financing is evil' mantra, but hey, you can handle complexity (even when delivered by a French).
ecb.europa.eu/press/key/date…
Milton's disciples! start with @BCoeure speech on sovereign debt. That complicates a bit the 'monetary financing is evil' mantra, but hey, you can handle complexity (even when delivered by a French).
ecb.europa.eu/press/key/date…
if 2, then the judges may be doing the Eurozone a favour. We are in a deadlock created by Germany's exorbitant privilege. Covid19 didnt break it, but German judges can.
us economists trying to decipher what the hell lawyers meant - a qualified yes? life will be difficult for PEEP? forget spread targeting?
oh wait, it's really a NO! well well, life just got very interesting again @Lagarde
this is absolutely mental. Spread targeting by legal means, where you invite the brave to take positions against the bund.
If it also applies to PEPP, this is very bad news for the Euro.
If it also applies to PEPP, this is very bad news for the Euro.
I am glad I am not a political scientist because I'd have to explain why a country is blowing up a political arrangement that truly works in its favour.
and it's even worse: German lawyers ordered the Bundesbank to SELL bunds within 3 months. In the middle of a pandemic.
But oh, the sweet irony of an ECB OMT for Germany.
But oh, the sweet irony of an ECB OMT for Germany.
complaining about difficult narrative, a bit rich from people who dont understand that monetary policy is not set in monetarist stone but evolves with financial market structure
hey, this grammar of finance with safe assets, repos, collateral, spreads, haircut and liquidity spirals is a bit difficult, so we'll keep to reading milton friedman's GOVERNMENT IS EVIL and make judgments on that.
who decides what 'comprehensive and substantiated' means - I hope not the German judges, apparently they cant read central bank literature.
also lawyers are mean to each other, and I say this as a heterodox economist
talk about comprehensibility, this sentence makes no sense. It wants to say that ECB monetary policy actions have fiscal implications (buhu), but that is the POINT! sovereign bond prices matter for the transmission mechanism of monetary policy.
so much monetarist ideology in the ruling, it really boggles the mind: QE has negative effects because it lowers interest rates on public debt, and that is BAD.
German lawyers dont like, or get, countercyclical fiscal policy. Nor do they understand that borrowing costs for sovereigns are not simply a matter of fundamentals, but also liquidity, leverage of bond holders, global dollar conditions etc.
#schwarzenull inflicted on Euroarea
#schwarzenull inflicted on Euroarea
I know we all have a bit of Schumpeter inside, but guys, have you seen your German government's response to the pandemic? It's a generalised BAILOUT to companies that may or may not be viable, who the hell can tell.
and in clear indication that German lawyers have no sense of irony, #BVerfG worries that ECB jeopardises the stability of the euro.
nice one CDU - have we been asleep while Germans turned into Marxists?
1. debt is bad can only mean capitalism is bad.
2. Germany is doing its best to sharpen the contradictions of European capitalism towards implosion.
All on Karl Marx's birthday.
1. debt is bad can only mean capitalism is bad.
2. Germany is doing its best to sharpen the contradictions of European capitalism towards implosion.
All on Karl Marx's birthday.
🍿🍿🍿 finally @EU_Commission shows some guts, under a German CDU president!
amazing Ulrich Bindseil is not on this list, but I guess a German at the ECB is not the same as a German at Bundesbank.
exorbitant privilege in a graph.
