Tuesday, December 16, 2008
(1) A fiscal sector that says more is needed, but the economy must wait until January. From Deutsche Welle:
Merkel acknowledged in a speech on Tuesday, Dec. 16, that the government's stimulus package "might not suffice." But Merkel hinted that she wants to coordinate future efforts with the incoming Barack Obama administration.
(2) A central banker who apparently failed his economic history course. From Bloomberg:
European Central Bank President Jean- Claude Trichet said there’s a limit to how far the bank can cut interest rates and signaled policy makers may pause in January.
“Do we have a feeling there is a limit to the decrease in rates? At this stage certainly yes,” Trichet told journalists in Frankfurt late yesterday. The comments were embargoed until today. Asked whether the ECB will refrain from a further rate reduction next month, Trichet said it wants to “concentrate at this stage on getting what we already decided to be really operational.”
Trichet should have audited one of Bernanke’s courses at Princeton.