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We continue to be amazed by the growth of the ESCB balance sheet. It appears to be as high as 50% of the total euro zone GDP. I would have thought that was impossible. No one has focused on this. Now, perhaps one can question whether this is a properly a net consolidated number as it is supposed to be. But there is little doubting the trend, which clearly points to a much more expansionary role by the ECB than the markets have hitherto appreciated.
The Amazing Growth of the ECB's Balance Sheet
by Marshall Auerback
Perhaps the ECB is finally grasping the nettle. If these numbers are anywhere close to being accurate, then it is surely the case most of the problem debt must have been absorbed. There can't be that much of it. Which would imply that the systemic threat posed by the euro zone is potentially overstated by the markets. That would be a HUGE plus for global stock markets and global stock market activity this year, if true.Are TPTB in the EZ finally coming to grips with the crisis as the EZ stares into the abyss? Let's hope so.
1 comment:
OK they may be "getting it" as far as capping rates.
But 7% is still pretty high from a relative basis to other global "risk free" rates, and more or less a "free ride" for the big banks who may buy these securities that yield what is now a pretty astronomical 7%.
And let us not forget that they are still pushing for austerity budgets for the real economy of the Eurozone.
Resp,
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