Article

2011-12-01 Economy

AEP: Fed saves Europe's banks as ECB stands pat

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Posted by tipper 2011-12-01 00:00|| || Front Page|| [11129 views ] Top

#1 They must think we're made of money...

Posted by Steve White 2011-12-01 00:23|| 2011-12-01 00:23|| Front Page Top

#2 They just print it.

Posted by newc 2011-12-01 00:37|| 2011-12-01 00:37|| Front Page Top

#3 Sarkozy: Europe's "Liquidity Run" Has Begun Because There Is An Unsolvable $30 Trillion Problem

Posted by Eohippus Phater7165 2011-12-01 02:40|| 2011-12-01 02:40|| Front Page Top

#4 for now the Fed is essentially just buying euros (using dollars).

they have done this many times previously and then unwound the position later

they did this to avoid precipitous decline in the euro (such a decline harms US exporters and US companies with overseas subsidiaries)- in the past this has always worked and probably ended with a net 'profit' for the fed

Of course this time the problem is not a declining euro; it is euro that needs to be either abolished or retreated from Greece-Italy-Spain-Portugal.

So we have functions with a discontinuity - the analytic nightmare.

Posted by Lord Garth 2011-12-01 07:08|| 2011-12-01 07:08|| Front Page Top

#5 Just more reason for the EUroweenies to hate us.

Posted by Spot 2011-12-01 07:52|| 2011-12-01 07:52|| Front Page Top

#6 Why do we keep getting AEP nonsense?

There's much better comment out there.

Posted by Bright Pebbles 2011-12-01 08:35|| 2011-12-01 08:35|| Front Page Top

#7 they have done this many times previously

Yes, but when Brussels arm twists Germany to pick up the tab, Brussels dictates to Greece et al how to run their countries. How, about we get to do the same to Brussels? Of course not. How silly to assume power goes with the process.

Posted by Procopius2k 2011-12-01 08:37|| 2011-12-01 08:37|| Front Page Top

#8 There's much better comment out there.

This is an important issue for us all, so if you have better sources/stories, please do post them.

Posted by lotp 2011-12-01 14:12|| 2011-12-01 14:12|| Front Page Top

#9 How, about we get to do the same to Brussels?
Been thinking the same thing. It's probably what the Euro leaders were thinking when they visited Obama last week.Their soft soap seems to have worked.
Another point, the Bernank stated in 2002:
The Fed can inject money into the economy in still other ways. For example, the Fed has the authority to buy foreign government debt, as well as domestic government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt.16
If you check footnote 16 it says:
16. The Fed has committed to the Congress that it will not use this power to "bail out" foreign governments; hence in practice it would purchase only highly rated foreign government debt.
Lokks like a bit of mission creep going on here.

Posted by tipper 2011-12-01 17:12|| 2011-12-01 17:12|| Front Page Top

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