Keeping Banks (not Greece) From Failing Is the Real Eurozone Crisis

Written by Steven Hansen Over the last several weeks, JP Morgan Chase & Co (JPM)  has remained in the headlines after suffering trading losses tied to the bank’s now infamous “London Whale” with losses at  $7 billion more or less (yes, maybe more).  With tangible assets at $125 billion, and annual gross revenue around $90 …

Update: Greece, Eurozone and the IMF

by Elliott Morss Earlier, I noted there were two parts to IMF Stand-By Program for Greece: austerity and increasing its competitiveness. However, by the beginning of 2012, the IMF had concluded that the austerity part of its plan for Greece had failed. Why? Because: the austerity measures were so extreme that initial efforts to implement …

Comparing U.S. and Euro Crises

by Elliott Morss Introduction The best weather forecast comes from watching the trends: if the chance of rain increases as you get closer to the day of interest, it will probably rain….  So I start by looking at what has been happening to IMF, OECD, and World Bank predictions for economic growth for the next …

Mario Draghi Nomination Based on Deception

by ECB Watch The Economic and Monetary Affairs (ECON) Committee was in charge of evaluating Mario Draghi’s credentials on behalf of the European Parliament. The view of the Committee, and accompanying evidence, was described in a 36 pages report released on 16 June 2011 just before the vote on the nomination by MEPs. It concluded …

Germany Must Do It, Not China

by Michael Pettis

I have already discussed last month why I think the desperate attempts by Europe to get China and other Asian and BRIC countries to bail out the weak sovereign borrowers is absurd, but the topic has become so important in the past two weeks, at least judging by the number of calls I have received from journalists, that I thought I would reproduce a discussion I recently had in a forum among a number of China specialists (the forum is Rick Baum’s estimable ChinaPol).

We were discussing an article that recently appeared in the New York Times calling for a Chinese bailout of Europe. According to the author, Arvind Subramanian, at the Peterson Institute, “Europe is drowning and needs a lifeline.” That lifeline is effectively a bail-out package from China.