Miercoles 16/11/11, CPI, produccion industrial, ind.casas

[admin]

La presion aumenta para que el ECB tome medidas drasticas.


BUSINESSNOVEMBER 16, 2011, 5:57 P.M. ET
Pressure Rises on the ECB

By MATT PHILLIPS, MARCUS WALKER and WILLIAM BOSTON
Pressure mounted on the European Central Bank to take drastic action to stabilize euro-zone bond markets, as investors shrugged off the bank's limited bond buying and European politicians sparred over the ECB's role in fighting the debt crisis.

ECB purchases of Italian and other euro-zone government bonds on Wednesday largely failed to halt the sell-off of struggling euro nations' debt. Investors continued to dump everything but German bunds and it became increasingly difficult to find private buyers for bonds issued by large, economically struggling countries such as Italy and Spain.


Euro-zone peripheral bonds fell back after the European Central Bank stepped back into the market to provide support. But how long can the ECB continue doing this and will it continue working? And is it all too late for Greece?

Politicians from France— whose bonds have also suffered in this week's market panic—and Ireland on Wednesday called on the ECB to intervene more decisively to prop up bond prices and restore investors' confidence in euro-zone government debt, adding their voices to a growing chorus of economists, investors and policy makers who say only the ECB now has the financial firepower to prevent a financial crash in Europe that would rock the global economy.

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But Germany's leaders continued to reject calls for the ECB to print money and buy bonds on a bigger scale, insisting that only economic reforms by national governments can solve the debt crisis.

The ECB, with support from Germany, has so far refused to act as euro governments' lender of last resort, and has steadfastly insisted that its bond-purchasing program is temporary and limited in scope. Critics say that has damped the purchases' effectiveness, as investors don't believe the ECB will support bond prices for long.


European Pressphoto Agency
A man wipes his face in front of a screen showing the historic chart of the Ibex 35, Spain's main index, at Madrid's Stock Exchange headquarters on Wednesday.

ECB officials have justified their cautious stance on philosophical and pragmatic grounds, saying that the bank's mission is to fight inflation, and that too much help for governments would reduce the pressure for fiscal and economic reforms in euro-zone economies such as Italy. Germany, meanwhile, fears larger-scale ECB bond buying could fuel inflation and jeopardize the central bank's political independence.

French Budget Minister Valerie Pecresse challenged the view that the ECB has no mandate other than to keep inflation low. "The ECB's institutional role is the stability of the euro, but also the financial stability of the euro zone," Ms. Pecresse said. "We trust the ECB to take all appropriate measures to maintain financial stability in the euro zone," as in 2008 when the ECB helped prop up the European banking system, Ms. Pecresse said. France has since 2010 pushed for more-decisive ECB intervention in bond markets, and argued this fall that the ECB should help finance the euro zone's bailout fund for cash-strapped governments.

Irish Prime Minister Enda Kenny said in Berlin on Wednesday that ECB is the only player in the euro-zone crisis with the resources to come to Europe's rescue. "My feeling is that the ECB should be the ultimate firepower," Mr. Kenny said during a public debate while German Finance Minister Wolfgang Schäuble looked on. The Irish leader acknowledged German leaders see the issue differently, but added: "What we've been concerned about is contagion."

Many economists, as well as U.S. officials, argue that the ECB should act more like the U.S. Federal Reserve and intervene on a grand scale in the markets to protect euro-zone nations' access to funding. But Germany's policy elite and public mostly believe central-bank bond-buying leads to high inflation of the kind that scarred Germany in the 1920s.

More:

The Source: Pressure Heaps on the ECB
MarketBeat: ECB Apparently Did Not Buy Enough Spanish Bonds
Row Over ECB's Role
German Bank Slams Crisis Plans
Heard: Euro-Zone Bonds Come Unstuck
Italy's Monti Names New Government
Greek Government Poised to Win Vote
Hungary's Debt on the Rise
Earlier: Turmoil Spreads in Europe
SmartMoney: Financial Advisers Bail On Europe
"A U.S. Federal Reserve model will not work" in the euro zone, Mr. Schäuble said in response to Mr. Kenny.

German Chancellor Angela Merkel said after meeting Mr. Kenny that the ECB's remit doesn't allow it to play a bigger fire-fighting role. "The way we see the [European Union] treaties is that the ECB does not have the possibility of solving these problems," she said.


Europe's debt troubles spilled over to top-rated nations that had been largely untouched by the crisis-including Austria, the Netherlands, Finland and France-in an ominous sign for European policy makers, Matt Phillips reports on Markets Hub. DANIEL ROLAND/AFP/Getty Images.

U.S. President Barack Obama told reporters earlier in the day, during a visit to Australia, that Europe needs to make "tough decisions" to calm financial markets. European authorities need "a firewall that sends a clear signal: 'We stand behind the European project, and we stand behind the euro,'" Mr. Obama said.

U.S. officials have pushed their European counterparts at recent international gatherings to harness the ECB's financial muscle, for example by letting it assist in financing the euro-zone bailout fund, the European Financial Stability Facility, which has too little spare lending capacity to stem the worsening debt crisis.

The ECB's limited, but still considerable bond-market intervention bore little fruit on Wednesday. The bank fought a running battle throughout the day, traders said, in an attempt to drive the yield on the 10-year Italian note below 7%. The trading session started with massive price rally that drove the closely watched rate down to 6.84%. Then, as ECB buying lightened, private sellers took over, driving the yield—which moves in the opposite direction of price—up to 7.22%, according to Tradeweb data.

Prices rallied in the afternoon, with some analysts citing ECB buying as a reason. In afternoon New York trading the yield on Italian 10-year notes was 6.994%.

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That traders were willing to take on central-bank buying directly suggests that current measures to stabilize the market for European debt are increasingly ineffective as the two-year crisis shows signs of flaring up into a fresh stage.

"This is a market that is dying," said Harvinder Sian, chief European rates strategist at the Royal Bank of Scotland in London. "And the ECB can play around at the edges but it will really take something much more decisive from the politicians and the ECB to really bring back stability."

A widely tracked measure of European funding costs rose to levels not seen since the 2008 financial crisis. The three-month euro-dollar cross currency basis swap traded as wide as minus 126 basis points on Wednesday, its peak since December 2008. This shows it is more expensive for European financial institutions to swap euros into dollars. Its elevated costs reflect investor concern the ECB isn't buying enough bonds to bring down yields to stabilize European debt markets.

Wednesday's move by the central bank followed Tuesday's tumultuous day of trading in which investors showed an alarming propensity to dump bonds issued by triple A-rated nations such as Austria, Holland, Finland and France. While prices for those bonds didn't get much worse Wednesday, they didn't improve much either. The yield gap between 10-year bonds between Austria, France, Holland and Finland—all triple-A rated—remain near the highest levels seen in years.

"That tells you that the only refuge out there is [German] bunds," said Ciaran O'Hagan, a European fixed income strategist with Societe Generale in Paris.

For nearly two years, the once-staid world of European government bonds has been subject to extraordinary price jags. Prices for bonds issued by heavily indebted nations such as Greece, Portugal and Ireland first crumbled in 2010, as doubts grew about their ability to pay off creditors. Spain, Europe's fourth-largest economy, soon came into focus. More recently, Italy, which has a massive debt load considered too big for other European nations to pay for, has seen prices for its bonds tank driving yields higher.

Along the way, markets have made knee-jerk moves on the latest headlines about European policy makers' proposed solutions. But Wednesday's trading, in which the ECB's presence failed to change the market's mood, suggests investors are increasingly unwilling to hang onto euro-zone government bonds while officials try to figure it out.

Traders say the most recent bout of selling isn't coming from fast-moving hedge funds making short term speculative bets. Rather they stress that long-term "real money" investors are increasingly exiting positions in European debt that they'll likely not re-enter anytime soon. That could do long-term damage to the investor base for European government debt.

[admin]

Tal como se advirtio desde un inicio el rescate a las automotrices Americanas en lugar de ser $14.3 billones es $26.3 billones. Ahora nosotros tenemos que seguir trabajando para pagar a los buenos para nada de GM y Chrysler. Mas impuestos destinados a la basura.

[admin]

Borges el jefe del IMF en Europa renuncia despues de un anio debido a la crisis.

Los anaslitas dicen que China tendra que tomar medidas expansionarias debido a la caida de los precios de las casas.

[admin]

Paul Ryan:

Se ha aprobado $15 trillones de deuda nacional, hoy es un dia vergonzoso en la historia de US. Uds. se merecen lideres mejores que los que ahora no quieren resolver el problema. En la casa de representantes, hemos propuesto soluciones claras para disminuir la deuda y para que la economia puede crecer y los americanos puedan prosperar.

We just passed $15 trillion in national debt, making today an infamous day in U.S. history. You deserve better than leaders who are unwilling to tackle this problem. In the House of Representatives, we’ve advanced bold solutions that lift this crushing burden of debt so that our economy can grow and Americans can flourish.

[jonibol]

Esas declaraciones de Paul Ryan tienen que ver con el supercomité de recorte de gastos?

[admin]

Asi es.