George Soros, the master of markets, gave a very interesting speech at the INET in Berlin. Not only are we trapped in the malfunctions of the Newtonian economic theories, but we are facing the worst ahead of us.
Ever since the Crash of 2008 there has been a widespread recognition, both among economists and the general public,that economic theory has failed. But there is no similar consensus, even among participants of this conference, on the nature and implications of that failure. As a sponsor of INET I am delighted because it shows that INET is open to widely different strands of new economic thinking. But I am not only a sponsor; I am also the proponent of an alternative interpretation of financial markets and today that is what I should like to talk about.
Must watch video and full speech below.
The Spanish situation is now reaching the “ridiculous” phase, where we will be getting conflicting messages on a daily basis it seems. Spain is telling the world it doesn’t need a bail out, but would love to see the ECB step up the bond buying. The “positive” effects from the mighty LTRO has only accomplished one thing, an arbitrage where the Spanish banks have loaded up on Spanish sovereign debt, all financed by the ECB. Despite this fact, some want the ECB to restart buying Spanish bonds. As we wrote earlier this week, we are getting that funny feeling regarding Spain. Maybe after all it is time to bring out those pesetas? From Bloomberg.
A Spanish minister called on the European Central Bank to do more to stem the sovereign debt crisis as the cost of insuring the country’s bonds against default surged to a record.
“They should step up purchases of bonds,” Jaime Garcia- Legaz, a deputy minister in Luis de Guindos’s Economy Ministry, said yesterday in an interview.
His comments came as ECB officials split over the steps to tame the crisis amid growing expectations that Spain will be the next euro member to seek a European bailout. Spanish banks’ borrowings from the ECB surged almost 50 percent in March, data showed yesterday, as they took almost a third of the longer-term lending offered to euro-region institutions.
What if austerity is not the proper receipt? What if Germany, writing the bail out tickets has misdiagnosed the European disease? The Atlantic on the European unemployment and austerity of Southern Europe.
Michael Hudson’s presentation for the session “The Challenge of DeLeveraging and Overhangs of Debt II: The Politics and Economics of Restructuring” at the Institute for New Economic Thinking’s (INET) Paradigm Lost Conference in Berlin. April 13, 2012. Hudson is as always worth listening to. Video below.
Michael Greenberger on the weak regulations on speculators swamping markets and lack of enforcement of existing laws on criminal intent, are driving up prices.