The doom of the markets, not to call them “owls “as a recent fashion, have some argument in more ‘to be thrown on the plate to counter the hopes of the optimists on chance’ to get out of the crisis tunnel. The BIS, the Bank for International Settlements, said, through the very Italian Claudio Borio, approaching a storm is brewing for a long time. A storm can cause there are definitely slowing the Chinese and other emerging economies, cause and effect of the collapse of oil prices in a classic circular motion which and ‘hard to locate the source, but also the continued growth of debt relative gross domestic product. The levels of public debt in fact continue to rise (less noticeable phenomenon in the private sector of mature economies following the crisis) while the GDP langue. Despite the measures exceptionally expansive growth in all major areas remains low, although Beijing has confirmed at the opening of the National Assembly of the People of economic growth target of 6.5-7% in 2016, and inflation no salt.
The operators begin to have doubts about the real capacity ‘of central banks to influence the course of the crisis, and these doubts could turn into a real collapse of the markets, much more’ drastic than that experienced in recent weeks. The target for inflation that has’ placed the ECB of 2%, the current state of things, and after three years of effort appears unattainable. In February, Eurostat photographed at a 0.2% inflation from 0.3% in January, a real cold shower for the Frankfurt institution. ECB, Federal Reserve and Bank of Japan in the coming days are called upon to make decisions to support financial markets and the economy, but will do so in a climate of skepticism. Put even hand to rate lever in fact likely to reduce even more ‘the banks’ profit margins, with the European ones already ‘in trouble’. The global debt, according to the BIS, at the end of 2015 exceeded 250% of world GDP, at end-2007 was still below 200%. And low rates complicate things, in the world there are already 6.5 trillion dollars of sovereign debt securities that offer negative returns.
Note that the voice of Bri not ‘isolated, even according to the OECD in 2016 there may be a new heavy bank default, worse than that of 2007 of Lehman Brothers. The OECD agrees with the Bank of regulations that “ammunition” to monetary policy level are virtually exhausted. European banks overall have $ 1,000 billion of impaired loans and in some cases are heavily exposed to emerging markets, in trouble ‘for the collapse in commodity prices.
From the private banks are raised similar cries of alarm, the Royal Bank of Scotland in a report which has also been echoed in the Guardian suggested its customers to sell everything, apart from the government more ‘reliable bond, and also according to Societe Generale’s financial crisis is awakening. A crisis for French analysts could be severe as that of 2008 and that could have heavy political implications, so much to do fear for the estate of the same in the case of Eurozone back into recession.
What could Dragons Thursday ‘to counteract the loss of confidence by the markets? First of all market participants expect an announcement of the continuation of the quantitative easing for another 3-6 months after the current deadline of March 2017 for an amount that could rise from 60 billion to 70-80 billion monthly. The securities purchased may then be extended with respect to the state than those for which there is’ a 33% limit for each issue and 33% of the entire stock of existing titles. The rate of interest on deposited funds from banks at the ECB could then down again, up to -0.5, although perhaps with a dual-threshold mechanism similar to that of the Swedish central bank (with more ‘disadvantageous rate that applies only over certain amounts’).
According to UBS, the ECB will take ‘note of the new trend of inflation and GDP linked to the collapse of oil prices, and will cut’ to its inflation forecast for 2016 from 1 to 0.3%, and for 2017 from 1.6 to 1.5 also lowering the GDP growth forecast for the Eurozone from 1.7 to 1.5% for both 2016 and for 2017. Wait then for the end of March a new LTRO auction, on favorable terms for banks that wish to join to finance.
(AM)
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