by Bill McBride on 3/02/2012 09:08:00 AM
Friday, March 02, 2012
A few stories from Europe:
From the Financial Times Alphaville: The ‘hoarders’ are back (thanks to Ltro 2)
Yes, the ‘hoarders’ are back. From Dow Jones:From the WSJ: EU Leaders Sign Fiscal PactFRANKFURT—Banks’ overnight deposits with the European Central Bank surged 63% on Thursday, shattering the previous record high, indicating an extremely elevated level of liquidity in the banking system after the ECB’s second three-year loan operation.... courtesy of Danske Bank (on the first Ltro):
The level of ECB deposits rose to €776.941 billion ($1.034 trillion) from €475.219 billion the day before, far exceeding the previous record high of €528.184 billion reached Jan. 17 in the wake of the ECB’s first three-year loan. ...Does this mean that the operation has failed to stimulate government bond purchases? No, not really. If a bank uses money from the LTRO to buy government bonds (or any other paper) in the secondary market, the amount will still show up as a deposit at the ECB (now on behalf of the seller’s bank). If a bank buys government bonds in the primary market, the amount will also show up as bank deposits at the ECB if the government spends the receipts or places them at a private bank. Thus, the increase in deposits doesnot imply that the 36 months LTRO has failed to stimulate government bond purchases (or other trading for that matter).
European Union leaders Friday signed the region's new fiscal pact, adopting strict new rules on deficits and debts, even as some members warned a tougher economic environment is challenging their fiscal commitments.More austerity.
The fiscal accord, which was finalized in January and calls for sanctions on those member states that fail to meet targets, was signed by 25 member states. The U.K. and the Czech Republic opted out.
And from the WSJ: German Retail Sales Fall
German real seasonally-adjusted retail sales fell sharply in January, initial data from the Federal Statistics Office showed Friday. The 1.6% decrease was far below analysts' expectations of a 0.3% increase. This followed a 0.1% increase in December.
Posted by Bill McBride on 3/02/2012 09:08:00 AM