The Mess That Greenspan Made - Part 32

Germans in Zero Interest Rate Hell

If the photo below from this Handelsblatt story is any indication, the Germans don’t think much of ECB Chief Mario Draghi’s latest policy move where interest rates were pushed further into negative territory (from -0.3% to -0.4%) and the monthly money printing effort was increased by a third (from 60 billion euros to 80 billion euros).

To wit:

An emotionless Mario Draghi, the president of the European Central Bank, uttered nearly the same words residents of the 19-nation euro zone have been hearing for years.

The ECB’s cheap-money rescue has kept alive the euro, but the cure has been toxic for a nation of savers trapped in zero-interest hell.

Being half German and half Italian (an unusual pairing for the late-1940s/early-1950s) and being well versed in the differences between the two cultures (extreme), it’s clear to me that the only thing Germans liked about the excerpt above was the word “emotionless”.

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Friday Morning Links

Draghi’s Deadly Derangement – Contra Corner
Now We Know Why the ECB Panicked – Alhambra Partners
In Germany, Zero Interest in Mario Draghi – Handelsblatt
ECB’s Draghi plays his last card to stave off deflation – Telegraph
The ECB is still only tinkering with Europe’s economic crisis – The Week
Life and Times During the Great Depression – Visual Capitalist
Future Economists Will Probably Call This the ‘Longest Depression’ – HuffPo
Former Putin Aide and RT Founder Died of Blunt Force Trauma – Vice News
Democrats’ superdelegate system is unfair and undemocratic – The Hill
3 winners and 3 losers from Thursday night’s Republican debate – Vox
Donald Trump on Violence at His Rallies: Protesters Are ‘Bad Dudes’ – Time
College community wants Trump rally booted from campus – CNN/Money
Why Trump’s rivals can’t catch him – Politico
Trump’s Popular Appeal – The Atlantic

U.S. futures higher after ECB turbulence – USA Today
Stocks Surge as Draghi Plan Gets Second Look – Bloomberg
The Assets of the Ultrarich Come Closer to Earth – NY Times
The Fear Factor in Global Markets – Rogoff, Project Syndicate
The Dow will keep trending down unless these two things happen – MarketWatch
Gold below 13-month top on dollar, heads for 2nd week of gains – Reuters
After ECB mayhem, put your trust in this one asset only – Marketwatch
More Upside Seen for Gold ETFs – ETF Trends

Is weak U.S. wage growth all because of who’s getting jobs? – WCEG
The False Promise of Last Year’s Wage Gains – The Atlantic
China Car Sales Hit the Brakes in February – WSJ
Why is labor mobility in India so low? – Microeconomic Insights
What’s the future for the Canadian economy — innovator or imitator? – The Hill
Brazil Prosecutors Seek Lula’s Arrest for Money Laundering – NY Times
One More Disadvantage of Buying a House: Longer Commutes – The Atlantic
Houses: who has stopped buying them? – Bank Underground
Central Bank Economists: Bad Policy Is INCREASING Inequality – Washington’s Blog
Central banks’ steroids aren’t working – CNN/Money


Whatever it Takes?

It looks like the folks over at Bloomberg will soon have to update the chart below (from this NIRP Primer the other day) after European Central Bank Chief Mario Draghi & Company pushed short term interest rates even lower – from -0.3 percent to -0.4 percent – while upping their monthly money printing effort from 60 billion euros to 80 billion euros.

The most unsettling aspect about this is that, like the Bank of Japan’s foray into unconventional monetary policy, the ECB’s moves are becoming routine, that is, routine in the same way that rising home prices were routine for a few years during the mid-aughts.

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Thursday Morning Links

What if the helicopters took off? – Economist
4 Economic Doomsayers You Can’t Afford to Ignore – Fortune
New Zealand interest rates cut in shock RBNZ move – ABC News
Markets betting on near-zero interest rates for another decade – Reuters
Will ’super Mario’ deliver? High hopes for robust ECB easing – CNBC
Draghi Has Banking Chiefs Bemoaning ECB’s Negative-Rate Push – Bloomberg
Japanese money market funds to close as returns prove elusive – Asian Review
Whole of Europe risks spinning into crisis if leaders mishandle Brexit – Telegraph
Keith Olbermann says he is moving out of Trump building – Washington Times
One Little Rule Change Could Help The GOP Defeat Donald Trump – Law News
Why The Polls Missed Bernie Sanders’s Michigan Upset – Five Thirty Eight
2 winners and 3 losers from the Univision Democratic debate – Vox
Democratic candidates asked: ‘Is Trump racist?’ – Politico

Stocks: 5 things to know before the open – CNN/Money
Global Liquidity Falls to 2008 Crisis Levels – FSO
Cramer: Jeffrey Gundlach wasn’t talking to you – CNBC
Bull-Market Birthday Crasher: Nothing Has Worked Since QE – Barron’s
How the U.S. government inadvertently launched a $3 trillion industry – Bloomberg
Hulbert: Key lessons from the Internet bubble – USA Today
Gold drops ahead of ECB meeting as euro retreats – Reuters
Gold prices hit by profit taking, stronger dollar –
Silver Cheapest To Gold In 7 Years – ETF Holdings Surge – GoldCore

Is trade really killing middle class jobs? – CNN/Money
Is Inflation About To Comeback? – Alhambra Partners
The World Economy Wreckers Of Beijing – Contra Corner
Singapore ’still world’s most expensive city’ – BBC
What’s In A Growth Target? For China, Hope And Simple Math – WSJ
China Inflation Fastest Since Mid-2014 as Food Prices Jump – Bloomberg
Former Brazil President Lula Charged in Connection to Money Laundering – Vice News
Home buyers may have to wait a bit longer for market to cool – MarketWatch
Affordability continues to challenge the housing market – Yahoo! Finance
China’s trilemma—and a possible solution – Bernanke Blog


Global Growth in the 21st Century

Global growth is a-changin’, at least according to this WSJ article and the chart below where readers are urged to ignore the right-most area of the dataset since the future is notoriously hard to predict (almost always too positive and too benign), though that doesn’t discourage economists from doing so.

The other notations relate to Europe’s big post-1990s stumble that, perhaps not coincidentally, began at the same time as the common currency. China really has been remarkably consistent, this trait likely being inversely correlated with the accuracy of the economic data that is produced in the Middle Kingdom.

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