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: , , , , ,




 
 
 

Phil's Favorites

Consumer Bureau To Decide Who Owns Your Financial Data

 

Consumer Bureau To Decide Who Owns Your Financial Data

What Should Banks, Fintechs Be Allowed to Do With All that They Know About You?

Courtesy of Jillian S. Ambroz, DCReport

A federal agency is gearing up to make wide-ranging policy changes on consumers’ access to their financial data.

The Consumer Financial Protection Bureau (CFPB) is looking to implement the area of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act pertaining to a consumer’s rights to his or her own financial data. It is detailed in section 1033.

The agency has been ...



more from Ilene

Zero Hedge

Cali Mansion Once Listed For $100 Million Sells For "Only" $48.4 Million

Courtesy of ZeroHedge View original post here.

Today in "a look into a luxury real estate market you will never likely participate in" news...

A famous L.A. mansion called "Opus" that was once listed for $100 million and has been on the market for over three years has finally sold - at a more than 50% haircut.

The 20,000 square foot mansion sold for $48.4 million this week, furniture included, according to Bloomberg. It is also the lates...



more from Tyler

Politics

Mythmakers: The Men Who Created Donald J. Trump

 

Mythmakers: The Men Who Created Donald J. Trump

Mark Burnett, Jeff Zucker, and the Trustwashing of a Fake President

Courtesy of Greg Olear, Prevail, author of Dirty Rubles: An Introduction to Trump/Russia 

...

more from Politics

ValueWalk

Einhorn's Greenlight Capital Re And Icahn's Icahn Enterprises

By The Acquirer's Multiple. Originally published at ValueWalk.

During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed Einhorn‘s Greenlight Capital Re (NASDAQ:GLRE) and Icahn’s Icahn Enterprises LP (NASDAQ:IEP). Here’s an excerpt from the episode:

Q3 2020 hedge fund letters, conferences and more

Einhorn's Greenlight Capital Re And Icahn's Icahn Enterprises

Tobias: Einhorn genius for a decade. The GOAT for a decade, a GOAT for the last decade. I think it could be back to the GOAT stage, possibly for the...



more from ValueWalk

Biotech/COVID-19

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

 

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

Now there is a third possible vaccine for fighting the COVID-19 pandemic. Jakub Porzycki/NurPhoto via Getty Images

Courtesy of Sanjay Mishra, Vanderbilt University

The biopharmaceutical company AstraZeneca has released data on what is now the third promising vaccine candidate against COVID-19 – and it has several advantages over those of its competitors, ...



more from Biotech/COVID-19

Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Friday, 12 June 2020, 08:06:43 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting (2)



Date Found: Saturday, 13 June 2020, 12:27:02 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Recession Forecasts Time Frame



Date Found: Monday, 15 June 2020, 11:07:52 PM

...

more from Chart School

Kimble Charting Solutions

Transports Sending Strong Bullish Message To Other Dow Indices?

Courtesy of Chris Kimble

Are Transportation stocks about to send a quality bullish message to other Dow indices this month? Sure could be!

This 3-pack looks at the Dow Jones Industrials, Transports, and Utilities indices on a monthly basis.

One week from the end of a month, the DJ Transports are attempting an important bullish breakout at (1). Unless a sharp reversal takes place in the next week, Transports could close out the month at new monthly closing highs!

The Dow is attempting to close at all-time highs this month, while the Dow Utilities Index remains a few percent below 2020 highs....



more from Kimble C.S.

Digital Currencies

Dalio Admits "I Might Be Missing Something" As Bitcoin Surges Above $18,000

Courtesy of ZeroHedge

Since the US election, Bitcoin prices (in USD) have surged a stunning 40%, also lurching higher after each vaccine headline hit.

Source: Bloomberg

Getting ever closer to its all-time record high...

Source: Bloomberg

As crypto prices soared overnight, Bridgewater Associates founder Ray Dalio stepped back into the fray, saying in a Twitter thread that “I might be missing something about Bitco...



more from Bitcoin

Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

more from M.T.M.

The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



more from Tech. Traders

Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



more from Lee

Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions





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. Contact Ilene to learn about our affiliate and content sharing programs.