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Giving risk assets a boost is a report in a German paper suggesting the ECB and the EFSF are...

Giving risk assets a boost is a report in a German paper suggesting the ECB and the EFSF are planning to coordinate purchases of Spanish and Italian debt. Despite German opposition, Draghi has garnered a majority in favor of bond purchases on the ECB governing council, but the plan's introduction may wait until September (not today's meeting).
Comments (2)
  • Michael Clark
    , contributor
    Comments (9601) | Send Message
     
    The problem is not high interest rates for Spanish bonds. The problem is huge debt levels in Spain that undermine the health of Spain, making the risk-reward ratio go thorugh the roof. Buying Spanish bonds is a bandaid for the huge gapint wound caused by the orgy of private debt, mostly from the Housing Bubble.

     

    The bandaid is not a fix. Spain has gangreen; and the ECB is struggling to get Germany's permission to put a bandaid on the leg. The leg needs to be cut off.
    2 Aug 2012, 07:02 AM Reply Like
  • Hendershott
    , contributor
    Comments (1619) | Send Message
     
    There is no fix. The debts would have to be forgiven. Spain, Italy et al become much smaller economies, dragging everyone, Germans included, down.
    2 Aug 2012, 03:13 PM Reply Like
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