Had history been democratic, their would have been no farming or industrial revolution.. ”
Apologies for lack of Porridge last week.. But, even from the top of the Alps I heard the people cheer as my prediction the ECB would cough up more free money for European banks, (TLTRO III) – come about. While Europe’s economy remains caught on the buffers, how long before the ECB surrenders completely and just hands everyone helicopter loads of money to get Europe working again? Or works out the brutal truth – the Euro is the problem. Under the current European financial regime, the reality is the ECB will never, ever, never be able to normalise or tighten rates – which is a wonderful thing for markets!
Hand the banks loads of Free Money! As the European economy is so dire, then what else can banks spend their free money on except buying more European Sovereign bonds? We all know the ECB will step up and buy them back in a crisis! So, on with the party hats and buying-boots, and scoop up European bonds. What’s not to like about the ECB’s money tree?
(And with hints the US may be slowing as the deficit rises and job creation wobbles… maybe time to buy bonds anyway…)
Meanwhile, I wonder how much Free ECB Money the new German Megabank – the well signposted merger of Deutsche and Commerz – will need? It’s interesting to see the Germans embrace the modern banking concepts we so conclusively proved pre-2007: 1+1 Bad Banks = 1 Good bank (see HBOS/Lloyds or ABN/RBOS for the mathematical proofs), or the old adage “Big Banks aren’t Too Big To Fail”…. (US Readers – Sarcasm Alert) Next thing the Germans will be recommending some politician to chair the new bank’s board, because that always ends well…. (again.. Sarcasm Alert).
Back in the real world… What’s on the agenda this week? Joy oh Joy, a whole series of Brexit Votes. Pass me the sharpened razor… Please make it stop…
I did try to keep up with Brexit.. but a week on the Italian slopes crystallised some views for me: UK politics has become “Italianised”:
