John Ward September 9, 2011 ECB'S STARK JUMPS SHIP, Uncategorized

CRASH 2 SENSATION: ECB’S CHIEF ECONOMIST QUITS AMID DEBT STORM

Jürgen Stark, chief economist of European Central Bank has quit the bank for “personal reasons.”

The Slog has been saying for months that tensions on the ECB Board had been beyond awful for some time. Now that top strategist Jurgen Stark has abruptly left – a man not renowned for his hero worship of Chairman J-C Trichet – let’s hazard a guess at what those personal reasons might be, should we?

Total outstanding sums borrowed by ClubMeds from the ECB today is €438bn. This number is doubling every seven weeks – and the speed is accelerating.
The total amount no longer being lent by banks to each other (through mistrust) and parked at the ECB is €169bn. Two months ago today it was €5bn. The money being parked by banks through the front door is going out the back door to ClubMeds….but faster than it’s coming in.

What Trichet is doing is buying junk using other people’s money

Not wanting to be the Chief Economist of a Central Bank about to go bang (especially if you disagree fundamentally with the bond-buying programme) is an excellent personal reason for leaving. Especially the day after your Chairman talked a load of old bollocks about how ‘responsible’ his ECB has been.

The markets, I’m told, are having an epi about it. But then, it’s been a rum old Friday one way and another.

On the same day that Wolfgang Schauble was yelling at the Greeks to shape up on debt repayment or else, Christine Lagarde boarded a plane from London to Marseilles….saying as she did so that she was calling upon all the developed nations to give first priority to economic stimulation. The Greek policies demanded by her employer the IMF have just done the opposite to that country, throwing it into a 5% contraction.

Earlier today, she told a beaming George Osborne that his policies were ‘on the right track’. His policy is one of fiscal consolidation with no economic stimulation at all, but Mme. Lagarde seemed not to notice the small contradiction in her remarks. Unsurprisingly, the mainstream media didn’t either.

Lagarde telling Osborne that his policies are on the right track is as logical as Eric Pickles telling the Chancellor he needs to lose weight.

But cheer up: Willy Hague has had the main hall of the Foreign Office restored. Heigh-Ho and Hurrah.

19Comments

Add yours

1

Physicist on September 13, 2011 at 5:18 pm

The author has a tedious and wearying obsession with male genitalia…

LikeLike
2

Bankrupt Taxpayer on September 10, 2011 at 12:02 pm

“Did you mean ‘looser’ or ‘loser’?”
Ha-ha. I did mean “looser” but I can fully understand that either word would be equally appropriate in that context ;-)

LikeLike
3

Mark on September 10, 2011 at 11:27 am

http://www.michigandejure.org/Home/PublicNews/tabid/100/ctl/ArticleView/mid/427/articleId/22/Great-British-Lawful-Rebellion-Has-Begun–the-people-have-had-enough.aspx

Learn it now.

LikeLike
4

James on September 10, 2011 at 11:26 am

LikeLike
5

Carys on September 10, 2011 at 11:17 am

Did you mean ‘looser’ or ‘loser’?

LikeLike
6

Bankrupt Taxpayer on September 10, 2011 at 10:28 am

“Not holding my breath on that”.

Nor me. The coalition is heavily constrained by the Lib Dems who are overwhelmingly in favour of EU continued existence and expansion of undemocratic crats.

LikeLike
7

Richard G on September 10, 2011 at 10:05 am

in Britain’s interests if handled well by our political elite.

Not holding my breath on that

LikeLike
8

Bankrupt Taxpayer on September 10, 2011 at 9:58 am

From that blog article:
“…once Greece leaves / is ejected from the EU (likely to follow hard on the heels of Greek withdrawal from the euro)”

I’m not sure if that will be allowed to happen as it might spell the end of the EU and a lot of USE True Believers who’ve spent the last 25 years creating their new fascist empire would be very upset. These people represent a huge head of steam to keep the EU on life support at any costs.
Something mid-way is more likely: if Greece exits the euro through debt default, it would mean a rejigging of the EU into a looser confederation of nations, hopefully based upon the Single Market Treaty. This would be in Britain’s interests if handled well by our political elite.

LikeLike
9

Gemma Laming on September 10, 2011 at 7:36 am

Let’s put Merkel’s thoughts another way around: just how much can her taxpayers actually come up with? How much are they actually willing to pay for the silliness of the private banks?

Nobody is listening to sense – and JWs suggestions of debt forgiveness are anathema to a private banker. So Greece takes the forgiveness for herself through a default. Wall st. would not like that though, which is one possible reason why there has been so much buying up of bonds rather than dealing with the real situation.

LikeLike
10

Ronnie on September 10, 2011 at 7:24 am

http://blogs.telegraph.co.uk/finance/andrewlilico/100011846/greece-the-final-furlong-beckons/

LikeLike
11

Hein on September 9, 2011 at 11:11 pm

Who can help me out?
I read that the problems to refinance their loans is not a big problem because for this year there are only roll-overs for about 50 billion euro.
The refinance rate is today 5,38%. But these are bonds just sold on the market and trying to find a buyer. In my opinion it is not needed for the ECB to buy these bonds to lower the rate. It just gives an impression that there is a risk in buying Italian bonds. If ECB just buys the roll-overs should be enough, the problem is that if they think that the rate is to high for them they just have to cut in their household. That might be a hard way to do so but it would restore the trust in Italian bonds and lead to lower intrest rates.

LikeLike
12

Timbo614 on September 9, 2011 at 6:12 pm

Monsieur Legarde (current?): Trouble at t’ mill luv?
Madam. Legarde: Aye! The ECB branch ***** financial ***** forecaster said “we’re ***** and then just ***** off himself! Now the ***** bank shares are even more ***** . What ***** next!
Monsieur Legarde: Nice Cuppa will sort you out luv…

LikeLike
13

James on September 9, 2011 at 6:11 pm

LikeLike
14

william, on September 9, 2011 at 5:13 pm

Jurgen Stark’s resignation(an honourable act)must be the first scene in a carefully orchestrated German protest against the PIGS failure to put their own houses in order,next week, or else,which if followed by a proper equity sell off when nothing much happens,will surely be met by Merkel telling her domestic audience that she is prepared to abandon the Euro for the sake of her taxpayers(ie a message to Sarko to read the riot act to Clubmed).Who knows how this will end?

LikeLike
15

Richard G on September 9, 2011 at 5:00 pm

with I think having seen the Netherlands join the German call against Greece will the “cut off” threat be any more likely to happen earlier rather than later especially in relation to the ECB changes?

LikeLike
16

John Ward on September 9, 2011 at 4:51 pm

I think you’re on the money there.

LikeLike
17

hrosario on September 9, 2011 at 4:33 pm

The level of deposits parked at the ECB by European Banks coupled with the fact that the ECB has flooded the system with cash, far in excess of any forseeable requirement means that the ECB is sedating the banking system for an anticipated shock. The only shock I can see, with my limited vision, is a hard default by Greece. The more comments issuing from the ECB and European governments about the sanctity of the Euro and not to panic, convinces me that this is going to happen soon, within a couple of months at the latest.
The decision by the Fed. Reserve Bank of New York to delay any further stimulus measures till after its meeting in September strengthens my suspicion.

LikeLike
18

j gordon on September 9, 2011 at 4:17 pm

Greece will be another Lehman. soon.

LikeLike
19

Richard G on September 9, 2011 at 3:20 pm

Reuters cite the bond buying here
http://uk.reuters.com/article/2011/09/09/uk-eurozone-idUKTRE7882SO20110909

LikeLike