By Tania Suárez, Madrid | Three resignations are likely to take place soon in the Bundesbank: Weber, Stark and now Weidmann. Barclays experts say “the death rate in this institution seems unusually high.” The Bundesbank is impressive in its power and majesty, but analysists consider “their lack of ability to adapt to the circumstances” is going to lead to its disappearance. Barclays team suggests that “the ECB’s adaptation contrasts with…
By Tania Suárez, Madrid | Global growth will remain below trend until later this year, according to JP Morgan expectations. Rates have dropped less than 50bp from their peaks in 2011 and are projected to fall further 20bp until late 2012. Developed markets authorities believe that “the limit of zero interest rates has eliminated the possibility of conventional action.” Meanwhile, emerging markets with still flexible rates, have “persistently high inflation…
MADRID | Draghi’s apparent resoluteness in shouldering the euro has dramatically turned the tide. No action has followed his words and yet the July nightmare has switched this month into a soothing dream. Undoubtedly investors were eager to take on board any good news reversing the excessive downside overshoot in the markets. Europeans leaders have also helped by wholeheartedly enjoying their holidays. For once, they have refrained from voicing the…
MADRID | In the dialectics of the confrontation about how much of a national rescue is the aid package being draft by Brussels for Madrid and Rome, politics has so far played the upper hand. Apparently, governments in Spain and Italy would attempt to depict any coming bailout under a different light than that of Greece, Ireland and Portugal so their parties can avoid the stigma of having failed their…
By Tania Suárez, in Madrid | Alberto Matellán is director of strategy and macroeconomics at Inverseguros SVB. In a conversation with The Corner, he said that even if Spain doesn’t formally request a bailout, “it will be necessary some kind of intervention.” However, he points out that the possible Spailout would be met via different instruments, and that there is a high probability that a bailout for Italy comes in…
There is no denying that the talk of an eventual Spanish national rescue by euro funds has now become a feature in any serious discussion about what’s next for the global economy. Even though always ready to confront but not conform to the most realistic conclusion market analysts find for Spain, the country’s president Mariano Rajoy admitted last week that a complete bailout appears on the table next to all…
By economist Jordi Paniagua, in Valencia | In principle, whether managing a company or the economy of a country, the message of do not spend more than earnings seems perfectly reasonable. Indeed, it has found a comfortable place in the collective mind. Even governments nowadays express themselves and their policies as though it were the stuff of domestic accounting. But enterprise and economy are quite different concepts. The manner in which…
After the Draghi’s drag, deciding not to take any immediate action to stop the euro bleeding, markets are digesting a very awaited yet not so bright U.S. job report. It was the best data in five months -July was the best hiring month since February- but still not sufficient to reassure. America added 163,000 nonfarm payroll jobs in July, the Labor Department said (compared to a revised 64,000 jobs in…
By JLM Campuzano, analyst, in Madrid | If the governor of the European Central Bank (ECB) said nothing new, why did the markets drop? To be sure, there was a deep sense of disappointment. His comments a week ago had sparked high expectations and, whether Mario Draghi admits it or not, hopes haven’t been met. And there is nothing worse than disillusioned investors. More disquieting, though, is that Draghi acknowledged…
Ben Bernanke is not taking the wallet out of his pocket, at least not yet. The Fed will first assess July and August US unemployment reports and also “financial developments”, as it said in a statement at the conclusion of a two-day meeting in Washington. Meaning what? Meaning financial stability in Europe, which is one of US main concerns. We’ll have to wait until September, but there are some hints…