We had already warned of this in the first part of this article. It has been a masterstroke, not because it has outmanoeuvred Merkel and her reluctance to let the ECB assume the country risk of the periphery, but because it has squared the circle at a political and pseudo-economic level. It is called LTRO (Long-Term Refinancing Operations). This move is nothing other than the ECB opening the floodgates for European banks to borrow € (and $) without limit. But the secret of the potion lies in the repayment term, as the funds have been lent on demand, at a ridiculously low rate, but for a whopping three years. That is the key. And consequently, a second round has been announced for February this year, for those who were too slow off the mark to catch the first train to the paradise of infinite and cheap liquidity. (more…)
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We have already pointed this out in previous articles 
«Some central banks in Europe are beginning to assess contingency plans for the possibility that some countries may leave the euro area or that the monetary union may collapse completely».» This is the headline of the 
These days we are seeing how the moment of truth is slapping Eurozone politicians in the face. The risk premium, i.e. the market's disdain for Italian debt is throwing the country, and therefore the rest of the Eurozone, into bankruptcy. Watching the Italian giant teetering on debt feet worth more than 120% of its vast GDP, Greece's bankruptcy may seem like child's play. 
Today we’re bringing you a real gem in the form of an interview. It is none other than the one given by the best fund manager of the first decade of the 21st century, Bruce Berkowitz, to the prestigious financial journalist Consuelo Mack just seven days ago. It is fascinating to read Berkowitz’s arguments and convictions today, right in the midst of the financial storm, when his flagship fund, Fairholme, has lost almost a third of its value since the start of the year. A slump that many see as a sign of his decline as a fund manager, but which some view as a huge opportunity. His interviewer, Mack, is regarded by *Money Magazine* as «the best money TV host», and her programmes attract a huge audience. Enjoy Berkowitz’s reflections whilst the financial world crumbles around us (we’ll be posting the full Spanish translation shortly):