Speaking of bumpy air, trespassing, and the forgiveness of debt, the Greek/German tragedy of midsummer seems to have landed on terra firma for at least a few months—although inevitably the weakness of the Eurozone with its common currency, but disparate fiscal philosophies, spells renewed turbulence in financial asset markets.
Billionaire investor Warren Buffett defended some of his core holdings in a televised interview on Monday, but reiterated that equities in general would look expensive in an environment with normal interest rates.
As widely expected, the European Central Bank opted to keep interest rates unchanged, with the refinancing rate (0.05%), deposit facility rate (-0.2%) & marginal lending rate (0.30%) all on hold in the wake of its April policy meeting. Despite the ho-hum decision, there were some unexpected fireworks (or more accurately, confetti) in ECB President Mario Draghi’s subsequent press conference.
Most European Central Bank policy makers judged that buying government debt was the only option big enough to fight the threat of deflation when they met last month, an official account of the debate shows.