Stiglitz: “Can the Euro Be Saved?”

by Joseph Stiglitz The euro may be approaching another crisis. Italy, the eurozone’s third largest economy, has chosen what can at best be described as a Euroskeptic government. This should surprise no one. The backlash in Italy is another predictable (and predicted) episode in the long saga of a poorly designed currency arrangement, in which […]

Kim & Trump in Singapore: “The summit produced little more than frothy statements without substance”

“The Singapore summit produced little more than frothy statements without substance, with little accountability for Kim Jong-un to cease and dismantle his nuclear weapons program.”  Jung Pak, SK-Korea Foundation Chair in Korea Studies and Senior Fellow in the Center for East Asia Policy Studies: The Trump administration will probably tout this as a Nobel-worthy effort by President […]

Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

U.S. economic growth could face a challenging slowdown as the Trump Administration’s powerful fiscal stimulus fades after two years, according to former Federal Reserve Chairman Ben Bernanke. Bernanke said the $1.5 trillion in personal and corporate tax cuts and a $300 billion increase in federal spending signed by President Donald Trump “makes the Fed’s job […]

Europe, Merkel, the ESM and a possible asymmetric shock

Much of the French and German press was preoccupied with analysing what Angela Merkel meant when she made her proposals on the eurozone. The consensus is similar to ours – there is not much change from what we knew already. What we do sense, however, is that some of the commentators underestimate the difficulty to […]

Trump might be leading the US to another meltdown

The US financial regulatory agencies have weakened banking rules. Then in late May, Congress voted to weaken them even further. They went after the Volcker Rule which prohibits banks from making risky investments with depositors’ money. The Volcker Rule is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which then President Barack Obama signed in 2010 […]

Solidarity in euro zone should not lead to debt union, Merkel says

* Solidarity should be helping others to help themselves – Merkel * ESM should become EMF with national oversight – Merkel * Merkel invites new Italian PM to Berlin   BERLIN, June 2 (Reuters) – German Chancellor Angela Merkel appeared on Saturday to rule out debt relief for Italy, saying in a newspaper interview that […]

French banks are by far the most exposed to Italian debt

With political developments in Italy keeping up tension in the financial markets, the German press has taken a look at the various eurozone countries’ exposures to Italian debt, public and private. Data from the Bank for International Settlements shows that French banks are by far the most exposed to Italian debt. Whether Germany comes second at […]

Italy may trigger new global crisis

In choosing this moment to heighten trade tensions with Europe, Donald Trump is ignoring major economic and political upheaval in Rome. Trouble in Italy, the euro area’s third largest economy, has the potential to trigger a global economic disaster on the scale of the 2008 financial crisis. Before enforcing restrictive trade measures that might blacken […]

The First Saudi-Iranian War Will Be an Even Fight

ince 2011, first in Syria and then in Yemen, proxy forces of Iran and Saudi Arabi have been in constant, brutal competition. Both sides seem to have concluded that a direct war isn’t in their interest, with neither having ever directly attacked the other. But there has always been a risk of escalation — and […]

Germany’s important Target-2 €902 bn debate. What happenes if a country leaves euro

Europe and the rest of the world should be examining the debate among German economists about what would happen to the Target-2 intra-euro area imbalances if a member country left Europe’s economic and monetary union. Target-2, an operating arm of the European financial system set up in the 1990s to regulate interbank credit, has grown […]