News
Bloomberg | Europe’s $2 Trillion of Distressed Debt Set to Outstrip U.S.
The distressed debt market in Europe is set to outstrip the U.S. for the first time as the region’s sovereign crisis forces banks to sell $2 trillion of under performing assets, Strategic Value Partners LLC said.
CNN: Money | Fed at a 'tipping point' on monetary policy
In the delicate balancing act between its two main responsibilities -- promoting job growth and staving off inflation -- the Fed has been squarely focused on stimulating employment. But Fisher thinks the time has come to wrap up those efforts and shift policy in the other direction.
WSJ | Europe's Rate Rise Signals End of Cheap-Money Era
In the U.S., where there is less inflation angst than in Europe, the Federal Reserve is unlikely to follow until very late this year or early next. Moving ahead of the Fed is unusual for Europe's central bank. The Fed moved first in the previous two global monetary-tightening cycles since the ECB was formed 12 years ago—in the late 1990s, and in the mid-2000s.
The Economist | And then there were three
The first of two articles on Europe’s debt crisis looks at Portugal’s decision to ask for help. The second examines the price Greece is paying for going down the same path
The Economist | The third bail-out
How to make sure the latest bail-out marks the beginning of the end of the euro zone’s debt crisis
Bloomberg | European Debt Crisis Morphs Into New Phase: Mohamed El-Erian
Portugal’s need for emergency assistance became inevitable last month once its parliament rejected the government’s plans for yet another round of austerity.
Econ Comments
WSJ | The Lisbon Irony
Europe's growth problems aren't the fault of central bankers.
WSJ | No Time for Euro Complacency
When Greece applied for a euro-zone bailout last May, the markets went into a tailspin for months, and when Ireland hit the buffers in December, the fallout lasted weeks. Yet Portugal's decision to throw in the towel Wednesday has barely troubled investors: the euro rose, Italian and Spanish bond yields remained close to 12-month lows and bank stocks rose.
AEI | Waving the Rules for Portugal
In the absence of an effective Portuguese government it is difficult to see how the EU can maintain the pretense that when bailing out the European periphery it does so only with the strictest of credible conditions attached.
Reports
RCM: Wells Fargo Securities | ECB Hikes Rates As Portugal Seeks Help
As widely expected, the ECB hiked its main policy rate by 25 bps. Although another rate hike does not appear imminent, we look for a modest pace of tightening in the quarters ahead.
