Wall Street Journal
October 19, 2011
We are all reacting to headlines – every new headline triggers another move. There is so much uncertainty it’s difficult to navigate.Thus spoke Jack Ablin, chief investment officer of Harris Private Bank, quoted in an article published today in The Guardian. The article first appeared online on Oct. 18 at 19.35 BST (14.35 EST) with the headline: “France and Germany ready to agree €2 trillion euro rescue fund.” Needless to say, as per Mr. Ablin’s prediction, New York markets moved significantly on the news.
An European Union official told us that the figure had been derived through a “simplistic” method.
The endowment of the fund is €440 billion but it can guarantee commitments of up to €780 billion. The question of how to “leverage” it to maximize its firepower has been dividing European policy-makers ahead of the upcoming summits here in Brussels this weekend. Over the last few days, debate appears to be centering around the idea that the EFSF will guarantee first losses in Italian and Spanish new bond issuances.
More
No comments:
Post a Comment