Ecb Cuts Benchmark Rate To 0.25%

[zugzwang]

Err.....no.

The reason Japans trade balance has gone negative has absolutely nothing to do with abenomics.

Rather Japan has turned off its nuclear industry pretty much completely which means it has to import fossil fuels to generate electricity.....and also has to pay for it.......

Imports of mineral fuels actually declined by 1% in September, the only category to do so!

OTOH manufactured good were up 22%, machinery imports were up 37%, electrical machinery 46% and within that semiconductors up 59%. Whole sectors of the Japanese technical/industrial economy once the envy of the world are being closed down, moved offshore, or driven out of business by more nimble foreign rivals.

Devaluing the yen hasn't helped. It just makes imports more expensive and the trade deficit correspondingly greater. 15 months of trade deficits, the longest run anyone can remember.

[zugzwang]

They will be arguing for more austerity now - austerity for the masses and increased wealth for the 1%. Europe repeating the mistakes of the past.

The Japanese have been pursuing anti-austerity policies for the last twenty years and where has it got them?

Unlike Spain, the UK has borrowed and spent the thick end of a trillion quid in the last five years. Spot the difference! The debt's been consumed by zombie households and zombie businesses with barely a flicker of improvement in the national output. So much for re-inflation. If only it were as straightforward as the Krugmanites pretend.

Edited November 8, 2013 by zugzwang

[Venger]

With Thursday's reduction—a move that came despite German resistance—the ECB joins other central banks including the Federal Reserve and the Bank of Japan in setting interest rates close to zero, an unthinkable prospect before the global recession five years ago and Europe's subsequent debt crisis.

.."We may experience a prolonged period of low inflation," ECB President Mario Draghi said, adding that prices would then gradually move higher. He said the rate move was aimed at shortening that period of weak prices.

-WSJ

Wonder how the cut will affect Germany. Lots of people want them consumer boom there, stimulate their domestic demand growth, worry less about exports, spend the surpluses and crank up the debt for the high life.

Perhaps a house-price-inflation boom, to reward the oldies, who as we've seen here, will do everything to tell you house prices aren't wrong after such a boom, and encourage the young to pay 'what they are worth'.

Edited November 8, 2013 by Venger

[Traktion]

End of days for national currencies. These idiots are going to drive people towards alternatives sooner or later.

[davidg]

If things get too bad and widespread rioting and looting get too bad I can always drive north

rioting and looting, sounds a bit like Brittany at the moment with the Bonnets Rouges revolution.

[Steppenpig]

Forgot to mention, there's been a fairly negative reaction to this in the German media, from the economics correspondents, and even the bank spokespeople. They may just be upset about being caught out of course, but most people seem to think it was totally unwarranted.

[Ash4781]

So any updates? Did a big Euro bank flag up a red warning light at the ECB?

[dances with sheeple]

I'm struggling to see where all the inflation is going to come from in the UK.

The only conclusion I can draw is that it will come from expansion of debt/reduction of savings. Because as far as I can tell there is very little wage inflation.

There is not going to be inflation in the UK IMO.

[dances with sheeple]

When is the penny going to drop that it is only a matter of time before europe has zirp rates and QE.

It might not be called QE, but QE it will be.

Euro market spivs want the sugar rush to equities as well. It is mad, but inevitable.

..._

When that happens countries will start to leave, it is happening already, they just want someone to be first, Greece needs to just say "****** it" and it`s game on. The little people are realising that the QE`ing benefits the big guys, not them?

[dances with sheeple]

I could say the same for the UK where every year the chance of living in decent accommodation gets worse as property prices and rent get more expensive. Wage inflation is low and energy and food get more expensive.

If things get too bad and widespread rioting and looting get too bad I can always drive north with everyone else. Personally I donot belive in these doomsday scenarios and anti Euro propaganda that the UK has been brainwashed with.

Low and stable prices are far better than rocketing cost inflation with stagnant wages.

Pumping cost inflation Japan and UK style is certainly not better than a little deflation.

Rents are falling in the UK, anything else is just VI propaganda.

[tomandlu]

Rents are falling in the UK, anything else is just VI propaganda.

Not in London, they ain't...

[Goat]

When is the penny going to drop that it is only a matter of time before europe has zirp rates and QE.

It might not be called QE, but QE it will be.

Euro market spivs want the sugar rush to equities as well. It is mad, but inevitable.

..._

So long as the ECB is run for the benefit of the Germans that isn't going to happen.

The collapse of the Euro is pretty much inevitable, my guess is that it'll be gone within about 18 months.

[dances with sheeple]

Not in London, they ain't...

HB cuts having zero effect then?

[dances with sheeple]

So long as the ECB is run for the benefit of the Germans that isn't going to happen.

The collapse of the Euro is pretty much inevitable, my guess is that it'll be gone within about 18 months.

God let`s hope so.

[tomandlu]

HB cuts having zero effect then?

Not noticeably. The only thing that occasionally sticks out are some very long voids, but they look plain weird. I can only assume that demand in our area (Streatham / Tooting) is being kept up by private renters. Travel into town is good, and it's just about affordable on a half-decent salary. Not sure what's happening with HB tenants and whether this area is still viable for them, but I'm guessing HB assistance is still available even if it doesn't cover the full rent. We need a four-bed - perhaps they're just few on the ground.

[dances with sheeple]

Not noticeably. The only thing that occasionally sticks out are some very long voids, but they look plain weird. I can only assume that demand in our area (Streatham / Tooting) is being kept up by private renters. Travel into town is good, and it's just about affordable on a half-decent salary. Not sure what's happening with HB tenants and whether this area is still viable for them, but I'm guessing HB assistance is still available even if it doesn't cover the full rent. We need a four-bed - perhaps they're just few on the ground.

You haven`t really researched London rents very deeply have you?

[tomandlu]

You haven`t really researched London rents very deeply have you?

And I'm no true Scotsman either...

Edit to add, if you want to find me some nice, cheap 4-beds in SW16, be my guest. Buggered if I can find them, and it's not like landlords are trying to hide from potential tenants. Perhaps my research is weak - where do you suggest I look? Are there hieroglyphics I need to decipher somewhere? I was vaguely under the impression that RM and browsing estate agents and rental agencies would be a good place to start.

Alternatively, you might be suffering from cognitive bias.

Edited November 8, 2013 by tomandlu

[dances with sheeple]

And I'm no true Scotsman either...

Edit to add, if you want to find me some nice, cheap 4-beds in SW16, be my guest. Buggered if I can find them, and it's not like landlords are trying to hide from potential tenants. Perhaps my research is weak - where do you suggest I look? Are there hieroglyphics I need to decipher somewhere? I was vaguely under the impression that RM and browsing estate agents and rental agencies would be a good place to start.

Alternatively, you might be suffering from cognitive bias.

Very likely actually.

[Wurzel Of Highbridge]

When that happens countries will start to leave, it is happening already, they just want someone to be first, Greece needs to just say "****** it" and it`s game on. The little people are realising that the QE`ing benefits the big guys, not them?

Why would Greece [the government] decide to leave the euro when all who are in charge are getting nice fat pay checks from the troika.

It will take a Greek revolution for them to leave the Euro.

[The Masked Tulip]

Why would Greece [the government] decide to leave the euro when all who are in charge are getting nice fat pay checks from the troika.

It will take a Greek revolution for them to leave the Euro.

+1

[dances with sheeple]

Why would Greece [the government] decide to leave the euro when all who are in charge are getting nice fat pay checks from the troika.

It will take a Greek revolution for them to leave the Euro.

That is why I said "little people".

[tomandlu]

Very likely actually.

In fairness, I assumed the same when the HB cuts were announced, and it's only the assault of reality that's disabused me of that assumption. I think there was one poster at the time who warned that the impact of the cuts on private rents in London was not going to match the expectations of many of us on here.

We pay £1450 a month. A search for four-beds within a mile of my kids' school for the same or less gives me a grand total of 0 properties. Expand it to three miles, and I can save £100 a month, but I have to live in Croydon, and not a nice bit.

And we're not talking quality here. My wife and I are both professionals, but out current place is very shabby. If I look at renting a 'middle-class' home (decent kitchen, decent bathroom, second toilet, etc.), then that's another grand a month.

Edited November 9, 2013 by tomandlu

[19 year mortgage 8itch]

Apparently prices in Greece are back to the same levels as in 1962. Imagine how good that would be.

http://www.ft.com/cms/s/0/c8564ce8-48ab-11e3-8237-00144feabdc0.html#axzz2k2U10ZaG

Can you give us a precis?

Found it. But really? What does that really mean? Especially against a backdrop of wage deflation. As the as article says, CPI at -2% is not unwelcome.

Personally, still not seeing the end of the world out there.

Edited November 9, 2013 by 7 Year Itch

[Traktion]

Apparently prices in Greece are back to the same levels as in 1962. Imagine how good that would be.

http://www.ft.com/cms/s/0/c8564ce8-48ab-11e3-8237-00144feabdc0.html#axzz2k2U10ZaG

As long as they didn't have 2013 debts, I'm sure it would be fine!

[Freeholder]

Can you give us a precis?

Found it. But really? What does that really mean? Especially against a backdrop of wage deflation. As the as article says, CPI at -2% is not unwelcome.

Personally, still not seeing the end of the world out there.

This means that every year the value of a given unit of domestically produced goods or services becomes less valuable relative to the currency their debts are denominated in. It is like adding 2% to the interest they pay.