I’ve received a lot of requests, mostly private, to explain Europe. In part, this results from a call I made on Italian Bond yields in late Oct to private correspondents.

However, much of it also has to do with my emphasis on the complete breakdown of ECB monetary policy and the similarities to 2008 in terms of money market shutdown. The fact, which I‘ve tried to call attention to, is that monetary policy as we think of it simply cannot operate without the money markets in general and the repo markets in particular. They are the marginal transmissions channel.

However, everything I know about the details of this situation come from Izabella Kaminska, which means that if you are not reading her you should be.