In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish chat about:
The ECB’s Latest Liquidity Move
- What impact will the recent flood of hundreds of billions of euros have on the European debt crisis?
- Counterparty Risk
- MF Global’s actions and the government’s reaction to them are eroding critical trust in the system
- Housing Prices
- Does the recent admission by the NAR that it has been overstating housing values provide any signal that we’re getting close to a market capitulation?
This week’s theme is hidden risk. It’s everywhere. The only thing keeping the financial system together right now is people’s confidence in it. As more and more people realize that banks are being subsidized at taxpayer expense, client assets can be confiscated without notice, and the ‘experts’ guiding us have been wildly wrong for years, this critical confidence may wane to a point where there’s not enough left to keep the system from seizing.
The ECB: People don’t realize this is emergency liquidity. It may help out bank stocks (similar to the way that the Fed’s QE and QE2 gave US banks advance access to ‘free money’). Those expecting this new liquidity to filter back into the markets to support more EU sovereign debt buying and support regional businesses are going to be mistaken.
by vriendsa