Money market on strike

By: Casper de Vries (Erasmus University Rotterdam) and Jon Danielsson (LSE)

A proposal on how to address information asymmetry.

My three point plan for the G20

By: Wolfgang Münchau

Coordinate a stimulus, pool the euro area's seats at the IMF, and start thinking about exchange rates.

The bloodbath continues

Equity continue to slump, risk aversion reaches new extreme hights, and oil falls below $50; high unemployment claims and downbeat statements by the auto companies spook markets; the Fed has quietely shifted away from targeting the Fed’s fund rate to a policy of quantative easing; Socialists face run-off for the leadership between Royal and Aubry; Iceland, meanwhile, secure an IMF rescue package, while Turkey is still playing hard to get.

Stimulus beckons as financial crisis deteriorates

EU Commission plans €130bn co-ordinated stimulus with a decision due at December EU summit; Austria’s central bank governors calls on Germany to raise stimulus; drastic cut in production at BASF, Renault and PSA Peugot Citroën is a bad omen for industrial production; Ireland is about to launch a multi-billion recapitalisation plan; global stock markets, meanwhile, crashed again, with the Dow Jones now under 8000, and European CDS indices at new record levels.

Spain’s budget deficit likely to surpass 3% next year

Zapatero administration plans to announce yet another stimulus next week; Jurgen Stark warns against excessive stimulus programmes, citing bad experiences with discretionary fiscal policies; ambitions to join the euro area are tempered by reactions from inside, at least for Hungary and the Baltics; in the UK, the debate about euro membership grows increasingly intense; the European Parliament, meanwhile, toned down its criticism of the ECB in its 10-year report on the euro.

Pressure is growing for a European stimulus

The EU is preparing for a combination of national, and EU-level stimulus to mitigate the recession; German government agrees to help Opel, under strict conditions; McCreevy wants to impose a central counterparty for the market credit defaults swaps; France is swept by a wave of strikes this week; Belgian wages to rise some 6% over the next two years, despite financial crisis; Irish economists predicts national “deflation”; Irish opinion polls, meanwhile, suggest there is now a majority for accepting the Lisbon Treaty.

After the banks, let's bail out the car industry

Germany and US are pondering to bail out large parts of the car industry as recession bites; a chaotic Socialist party election process goes into next round after Delanoe drops out; Jean Pierre Jouyet will quit the French government to became head of the French SEC; the European Commission imposes tough conditions on German bank bailouts; global leaders, meanwhile, held an inconsequential summit in Washington.