European Bond Market Meltdown; PIIGS
Friday, November 12, 2010
European Bond Market Meltdown; ECB is Buyer of Only Resort for Greece, Ireland and Portugal
Thing's don't matter until they do. Ireland finally matters. So does Portugal. The big event happens when Spain and/or Italy matters, and that is just a matter of time.
In the meantime, a huge feud is developing between European Central Bank President Jean-Claude Trichet, Bundesbank President Axel Weber (the likely successor to Trichet), and German Chancellor Angela Merkel.
Right now, ECB’s Trichet Is Buyer of Only Resort as Debt Crisis Worsens. http://noir.bloomberg.com/apps/news?pid ... x__IctFSIU
European Central Bank President Jean-Claude Trichet is the buyer of only resort as the euro area’s bond market melts down.
Just six months after he threw out his rule book to prevent Greece’s debt crisis from splintering the euro area, the 67-year old Frenchman may again be the only policy maker able to prevent the collapse in Irish and Portuguese bonds from spreading. That may require him to ignore opposition from Bundesbank President Axel Weber to the ECB’s bond-buying program and expand purchases of sovereign assets, according to Citigroup Inc. and Royal Bank of Scotland Group Plc.
“The ECB’s lack of action is puzzling to say the least and begs the question as to whether it’s fulfilling its financial- stability mandate,â€
