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Realistbear

E C B ( Germany) To End Q E

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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8033506/ECB-hawks-spook-debt-markets.html

ECB hawks spook debt markets

Eurozone experts are increasingly worried that the European Central Bank (ECB) is moving too fast in pulling the prop from under the financial systems of Greece, Ireland, Portugal and Spain, risking a repeat of the premature tightening in mid-2008 that ended in grief.

By Ambrose Evans-Pritchard

Published: 6:00AM BST 30 Sep 2010

197,345 Comments

Jean-Claude Trichet, president of the European Central Bank Photo: Getty Images A string of ECB governors have said this week that emergency support must be withdrawn soon, signalling a phasing out of the unlimited lending facilities that have acted as life-support for banks of high-debt states.

This puts the ECB on a very different tack from the central banks of the US, Britain, and Japan, which have abandoned "exit strategies" and begun to prepare for fresh quantitative easing as a precaution against a possible growth relapse. "The ECB seems set on a pre-ordained course, oblivious to other subtleties," said Julian Callow from Barclays Capital.

As it is contained in the EZ the Euro is set for take-off vs. $, £ and Y. I somehow think not.

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Good or bad for the Euro? In theory less qe=stronger Euro but what about the implications of the PIIGS being allowed to sink?

From the farticle:

The comments have since been echoed by more dovish members, suggesting that the ECB has now decided on its exit strategy regardless of the crisis in Ireland and Portugal, where bond spreads have hit fresh records. "The market has been a bit spooked by this," said Nick Matthews from RBS.

Hans Redeker from BNP Paribas said the ECB was taking a gamble by shutting its various lending facilities, and letting its three-month operations run out at the start of next year.

"Is it wise even to have this kind of conversation at the moment? The ECB is taking a very strong view on recovery and if they are wrong it is not clear that the weaker countries can cope. We think there is going to a double-dip recession in eurozone periphery," he said.

Bottom line: The PIIGS can go do naughty things to themselves.

Edited by Realistbear

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At least the ECB are trying to do the right thing and return to something like sensible economics... unlike our lot and the FED who seem content to go to hell to maintain asset prices for the rich.

Maybe this explains recent euro strength. I think the euro could go back to $1.50+ if they are prepared to sacrifice the PIIGS. We've been assuming that a PIIGS default will mean a weaker euro and that aint necessarily so. If the EZ refuse to join in with QE2 then the US/UK might have to have a rethink. I live in Hope (and die in Castleton!).

Edited by Constable

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At least the ECB are trying to do the right thing and return to something like sensible economics... unlike our lot and the FED who seem content to go to hell to maintain asset prices for the rich.

Maybe this explains recent euro strength. I think the euro could go back to $1.50+ if they are prepared to sacrifice the PIIGS.

Wont be long before euro strength starts to hurt. The greek tragedy is wearing off and the spanish issue is barely registering anymore. Merkel has to find more real bad news for the euro otherwise they are going to lose ground in the currency war.

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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