Posts Tagged ‘Robert Mundell’

Geithner on “Sustaining the Unsustainable”; Bill Gross, Robert Mundell say Sovereign Default Likely Inevitable

Geithner on "Sustaining the Unsustainable"; Bill Gross, Robert Mundell say Sovereign Default Likely Inevitable

tim geithnerCourtesy of Mish

Sustaining the Unsustainable 

Treasury Secretary Tim Geithner had me laughing out loud over his statement yesterday in Beijing where he took part in the two-day U.S.-China Strategic and Economic Dialogue.

"European leaders face the difficult challenge of trying to restore sustainability to an unsustainable system."

Yes Tim, that challenge would indeed be "difficult", in fact, impossible by definition.

It is a contradiction in terms and thus logically impossible to suggest it is possible to "sustain the unsustainable". Geithner needs math lessons or logic lessons, most likely both.

Sovereign Default Inevitable

With Geithner focused on the impossible, others have a more practical outlook. For example, Bill Gross and Noble Prize winning economist Robert Mundell say Sovereign Default May Prove Inevitable for Nations.

Pacific Investment Management Co.’s Bill Gross said restrictive lending rates and austerity measures that slow growth may leave default as the “only way out” for some sovereign borrowers dealing with mounting debt and deficits.

“Credit and equity market vigilantes are wondering if in many cases sovereigns haven’t already gone too far and that the only way out might be via default or the more politely used phrase of ‘restructuring,’” Gross wrote in his June investment outlook today on the Newport Beach, California-based company’s website. “It may not be possible for a country to escape a debt crisis by reducing deficits.”

“At the now-restrictive yields of Libor plus 300-350 basis points being imposed by the EU and the IMF alike, there is no reasonable scenario which would allow Greece to ‘grow’ its way out,” said Gross, co-chief investment officer of Pimco and manager of the world’s biggest mutual fund.

Nobel Prize-winning economist Robert Mundell said reworking debt may be “inevitable” for one or two countries that share Europe’s common currency in the next five years.

“Debt restructuring may be needed for one or two fiscally weak euro members,” he said today at a conference in Warsaw. “In five years it may be inevitable, but it doesn’t mean euro deconstruction, it just means debt restructuring.”

Geithner Pleads Bazooka Be Fired

As noted above, it is not only “difficult” it is impossible by definition to achieve the unachievable, thus extremely foolish to even attempt such a maneuver.

However, logical impossibilities did not stop Geithner’s plea to fire the $1 trillion


continue reading


Tags: , , , , , , , , , , , ,




Italy a Bigger Threat to EU than Greece; Italian Derivatives Draw Scrutiny; Mundell Wants Cap on Euro Gains; Academic Wonderland

Italy a Bigger Threat to EU than Greece; Italian Derivatives Draw Scrutiny; Mundell Wants Cap on Euro Gains; Academic Wonderland

Euros

Courtesy of Mish

Robert Mundell, the man who laid the groundwork for the establishment of the Euro claims Italy is a bigger threat to EU stability than Greece.

Please consider Italy Is Top Threat to Euro, Columbia’s Mundell Says

Italy, saddled with the euro region’s second-largest debt, is the “biggest threat” to the economy of the 16-member bloc, according to Nobel Prize-winning economist Robert Mundell.

“Italy has got to be worried,” Mundell, a professor at Columbia University, said today in a television interview in New York. “If Italy became a target then this would create a big problem for the euro. Whatever is being done to Greece, possibly to Portugal and maybe Ireland, has to also save Italy from that problem.”

Italian officials have tried to prevent Italy from being lumped together with some of the euro zone’s smaller economies – – Portugal, Ireland, Greece and Spain — that have drawn investor concern about their ability to control deficits and debt. Italian Prime Minister Silvio Berlusconi said Feb. 10 that those nations were doing “much worse” than Italy and that the “markets have given us their faith.”

“It would be very difficult if Italy got tarnished with the same problem,” Mundell said, referring to the risk the European Union may need to provide financial assistance to some of its members. “It would be very difficult to bail out Italy.”

Mundell won the Nobel Prize in 1999 for research that helped lay the foundation for Europe’s single currency.

Italy’s high debt level would create problems for the entire euro region if rising financing costs make it difficult to service the country’s borrowing, Mundell said. Italy has about 1.8 trillion euros ($2.5 trillion) in debt, more than five times that of Greece and the equivalent of about a quarter of the euro zone’s debt.

If markets were to lose confidence in Italian public finances, then the European Central Bank would have its hands tied by the Maastricht Treaty, which says the central bank must orient monetary policy exclusively toward keeping inflation under 2 percent.

“The Treaty of Maastricht puts a straight jacket on the ECB,” Mundell said. “Monetary policy itself would have to bend a little if a country as big as Italy got into trouble.”


continue reading


Tags: , , , , ,




 
 
 

Zero Hedge

Former 'Plunge Protection Team' Member Warns "Blockchain Is Freaking Governments Out"

Courtesy of ZeroHedge. View original post here.

Dr. Pippa Malmgren, a US policy analyst and former member of the Working Group on Financial Markets, a government entity better known by its nickname, the “Plunge Protection Team,” appeared on Erik Townsend’s MacroVoices podcast to discuss bitcoin and the European refugee crisis, while also offering some clues about how the PPT, famous for its secrecy, operates.

...



more from Tyler

Phil's Favorites

Ellen Brown's Certified Nutcase Proposal to "Save Illinois"

Courtesy of Mish.

Readers are concerned about the sorry state of affairs in Illinois.

Specifically, reader Mark asked about Ellen Brown’s July 23 article Saving Illinois: Getting More Bang for the State’s Bucks.

Brown says Illinois pensions have “surplus funds and rainy day funds tucked away around the state.”

That statement alone is enough place her in the looney bin, but it gets much worse.

She proposes guaranteeing the pensions, liquating them, then paying down the state of Illinois debt. The results would then be &#x...



more from Ilene

Insider Scoop

Earnings Scheduled For July 24, 2017

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Hasbro, Inc. (NASDAQ: HAS) is estimated to report quarterly earnings at $0.46 per share on revenue of $970.25 million.
  • Cal-Maine Foods Inc (NASDAQ: CALM) is expected to report quarterly earnings at $0.13 per share on revenue of $317.67 million.
  • Halliburton Company (NYSE:...


http://www.insidercow.com/ more from Insider

Chart School

Weekly Market Recap Jul 23, 2017

Courtesy of Blain.

This past week represented so many of the weeks of 2017; slow action with a bit of an upward skew.   Monday, Tuesday, Thursday were sleeping – and minor gains Wednesday were offset by small losses Friday; in the end we had small gains for the week!  Rinse, wash, repeat.   For the week the S&P 500 added 0.5% and the NASDAQ 1.2%.  Sixty eight S&P 500 companies reported earnings this past week so that was the focus.

Fun fact:  Until Friday’s loss, the NASDAQ had a 10 day string of gains, matching its longest streak since Feb. 24, 2015.

The European Central Bank left key rates unchanged...



more from Chart School

Biotech

A new vaccine is promising to advance the frontier of eliminating malaria

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

A new vaccine is promising to advance the frontier of eliminating malaria

Courtesy of Simon KariukiKenya Medical Research Institute

A malaria vaccine will be piloted in Ghana, Kenya and Malawi to assess its suitability. Siegfried Modola/Reuters.

More than 30 malaria vaccine candidates are at various stages of development. The RTS,S vaccine is at t...



more from Biotech

ValueWalk

Curreen Capital - Do I Regret Selling Those Stocks?

By VW Staff. Originally published at ValueWalk.


Curreen Capital – Do I Regret Selling Those Stocks?

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

We respect your email privacy

Meditations / Pixabay

The post Curreen Capital – Do I Regret Selling Those Stocks? a...



more from ValueWalk

Digital Currencies

Bitcoin (BTC/USD) Nears All-Time High on Spike Above Daily Chart Downchannel Resistance

Courtesy of ZeroHedge. View original post here.

Bitcoin (BTC/USD) crushed shorts yesterday, smashing above the daily chart's downchannel resistance and soaring towards the all-time high around 3000. With yesterday's massive rally, the negative weekly MACD crossover has been proved a false signal.  Odds are quite good that a sustainable longer term BTC/USD bottom was found last week, especially with ETH/USD also strongly rebounding this past week.  Some consolidation can be expected today with daily RSI and Stochastics tiring, although with daily MACD just having positive...



more from Bitcoin

Members' Corner

Why we need to act on climate change now

 

Why we need to act on climate change now

Interview with Jan Dash PhD, by Ilene Carrie, Editor at Phil’s Stock World

Jan Dash PhD is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, Jan devotes a chapter to climate change and its long-term systemic risk. In this article, Ilene interviews Jan regarding his thoughts on climate change and the way it can affect our futu...



more from Our Members

OpTrader

swing trading portfolio - week of July 17th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



more from M.T.M.

Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



more from Promotions

Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



more from Kimble C.S.

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David



FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>