tag:blogger.com,1999:blog-4360130099110594711.comments2022-11-30T14:01:36.523-05:00Ante HocUnknownnoreply@blogger.comBlogger13125tag:blogger.com,1999:blog-4360130099110594711.post-64900751693527643132014-12-31T13:18:30.414-05:002014-12-31T13:18:30.414-05:00The various forms of income suppression may be a r...The various forms of income suppression may be a relevant consideration - provisions for general losses and the revaluation account for securities that have been marked higher. These two account for 12% of total assets at end-2013 (22% isolating intra-Eurosystem claims and other financial assets). PureMacronoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-17697190033196728092013-06-11T11:02:27.275-04:002013-06-11T11:02:27.275-04:00To play devil's advocate: Even mere talk by Dr...To play devil's advocate: Even mere talk by Draghi can move prices. Just like government change per se can move prices. But neither Draghi talk nor changing personnel or who is the prime minister changes anything real, it is the actions that markets expect that will be taken that matter. So if Draghi says something markets adjust expectations (of future monetary policy) and thus prices, if identity of prime minister changes markets adjust expectations (of future fiscal policy) and thus prices.<br />Just saying that this was meaningless is simply not enough in the context of macro. All these prices are much more dependent on expectations about future actions, than about past actions themselves.<br />So you may very well be correct, but unfortunately your arguments/evidence are too weak to conclude that the ECB takes undue credit.......Quite unfortunate. Work harder :-)<br /> Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-18128805335002840272013-06-09T09:22:29.332-04:002013-06-09T09:22:29.332-04:00Its not cherry picking as the spread widened furth...Its not cherry picking as the spread widened further to Spain's detriment after March 1. You raise a good point about showing the Spain/Italy spread over the time - perhaps we can address that in a later post. <br /><br />Still - the question remains whether a meaningful government change in Italy or a central bank refinancing operation with no economic substance was more likely to have caused the spread decline. Willnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-5778296810180690902013-06-06T15:52:01.291-04:002013-06-06T15:52:01.291-04:00Well March 1, 2012 isn't in your graph above. ...Well March 1, 2012 isn't in your graph above. That seems like cherry-picking data.<br /><br />It seems to me your original argument was that the forming of the Monti government caused Italian yields to drop quickly, in a matter of weeks, not months (see your graph).<br /><br />Another way to put this: Why don't you draw the Italy - Spain spread in the above graph? Then we can easily see whether it falls or not after new Italian government announced. If that spread stays constant or even widens that would be evidence against your argument about the true cause of the decline in Italian yields.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-65941262016244911942013-06-06T15:30:38.805-04:002013-06-06T15:30:38.805-04:00Great question - the spread in the 3-year was Ital...Great question - the spread in the 3-year was Italy +100 basis points on October 1, 2011. It was Italy +270 bps on November 7 but by March 1, 2012 the same spread was 0 bps. Willnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-87518360347812854902013-06-06T15:16:45.940-04:002013-06-06T15:16:45.940-04:00So what is your explanation for the similar, almos...So what is your explanation for the similar, almost parallel development of Spanish yields? While one can imagine some benefit from radical change of Italian government for Spain, why would they move so much in tandem? Shouldn't the gap between Italian and Spanish yields have narrowed after Italian government change?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-5524586777730586812013-03-06T15:56:17.735-05:002013-03-06T15:56:17.735-05:00In terms of the reduction attributable to sovereig...In terms of the reduction attributable to sovereign exposure, both Spanish and Italian banks have substantially increased their holdings of their domestic sovereigns<br />Spain (http://www.tesoro.es/doc/EN/home/estadistica/06I.pdf)<br />Italy (http://www.bancaditalia.it/statistiche/stat_mon_cred_fin/banc_fin/pimsmc/2013/sb7_13/en_suppl_7_13.pdf)<br /><br />Eurosystem national central banks have also bought up some Italian and Spanish sovereigns (http://www.ecb.europa.eu/press/pr/date/2013/html/pr130221_1.en.html)<br /><br />In terms of the reduction attributable to non-sovereign exposure I am not certainUnknownhttps://www.blogger.com/profile/03898545354202501806noreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-70455736662920979292013-03-06T07:30:53.920-05:002013-03-06T07:30:53.920-05:00If these countries are reducing their exposures wh...If these countries are reducing their exposures who is buying them? Local investors? Non-Europeans?David Schamishttps://www.blogger.com/profile/08544266650346009917noreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-65255382080164751532012-11-23T12:02:31.079-05:002012-11-23T12:02:31.079-05:00Will, good analysis. And now that Draghi has addre...Will, good analysis. And now that Draghi has addressed the problem by fully committing to convertibility, Target2 imbalances have been declining since September. JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-11627498792818988622012-08-04T21:41:31.719-04:002012-08-04T21:41:31.719-04:00Hi Will,
Interesting idea. I'm more of a cent...Hi Will,<br /><br />Interesting idea. I'm more of a central bank watcher, government finance isn't my thing. But it seems to me that this plan would surely be more politically feasible than outright bond purchases, simply because 9 billion euros/year sounds like a lot less than 600 billion. A political free lunch to say.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-54665075831594491032012-07-25T09:55:30.379-04:002012-07-25T09:55:30.379-04:00BeautifulBeautifulAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-26799250440450633362012-06-07T16:32:10.674-04:002012-06-07T16:32:10.674-04:00According to Fed total US commercial bank assets i...According to Fed total US commercial bank assets in June 2007 were 9.96 trillion and are 12.78 trillion today meaning US assets (for commercial banks) are up around 27% over the past five years. Note the European data includes money markets<br /><br />Todays data http://www.federalreserve.gov/releases/h8/current/#fn19<br />Data from June 07 http://www.federalreserve.gov/releases/h8/20070601/Willnoreply@blogger.comtag:blogger.com,1999:blog-4360130099110594711.post-31065098883501887392012-06-05T09:13:38.253-04:002012-06-05T09:13:38.253-04:00Does a similar graph for the US look any different...Does a similar graph for the US look any different?David Schamishttps://www.blogger.com/profile/08544266650346009917noreply@blogger.com