The enthusiasm over the lower house approval in Germany’s Parliament of the euro bailout plan lasted exactly one minute as we await the upper house. A sell on the news is the only reason I can come up with (yes vote was widely anticipated) or a bout with reality as it’s never good that we even got to this point and the problem of too much debt has not been dealt with. The ECB Vice Pres said “money and credit growth lies at the heart of most boom and bust cycles” and therefore they won’t have an “over activist” monetary policy. If only our Fed heeded that. Also of focus was the weaker than expected data out at 4am in Europe. German’s May IFO business confidence # was a touch below expectations even though it’s the 2nd highest figure since mid ’08. The May Euro Zone services and manufacturing composite index was 1 pt below estimates. US$ 3 mo LIBOR rose to .497, another fresh 10 month high.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “German’s lower house passes bill, market rallies for 1 min”

  1. Abhishek says:

    Wonder what choice Merkel had after committing with the European leaders to the bailout.Its a different issue that this does not resolve the structural problems of the EU

  2. Deborah says:

    Lol, “Market rallies for 1 min.”

  3. Machiavelli999 says:

    This is a little bit OT: But peter, you continue to insist on inflation, even though we are in the most deflationary environment in 70 years. As Krugman says, your kind continues to yell FIRE! during a flood.

    http://krugman.blogs.nytimes.com/2010/05/21/crying-fire-fire-in-noahs-flood-3/#more-9453