21st Aug - Weekender

Summary: Will the Fed announce QE3 next Friday? How much of the Italian and Spanish debt ECB bought, and how many will they buy next week? How much more short-term funding pain can the weakest eurobanks take?

Joke of the day: ”Chicago Fed National Activity Index: Doesn’t get the attention it deserves, but this report will be about July, which is when dinosaurs roamed the earth.”

EURO CRISIS

Very nice roundup

Will Europe come tumbling down? – Fortune

European Roundup: Germany Nixes Eurobonds Once Again, So Does EU President Herman Van Rompuy; Belgium Wants Eurobonds and Bigger Bailouts – Mish’s

(pdf) What to do when the euro crisis reaches the core – CEPS

“traders had behaved in a fundamentally disproportionate manner”, no to Eurobonds for now

Financial markets are overreacting, says EU president Van Rompuy – The Telegraph

European banks' dollar funding woes feeds worries – Reuters

On EU banks, Solvency or Liquidity? - Or BOTH? – Zero Hedge

“Expect more social unrest and a huge recession in Europe because both are on the way. Germany will not be immune.”

Private Consumption in Portugal Plunges 3.4%, Biggest Drop in 30 Years; Expect Rest of Europe to Follow – Mish’s

If France's economy is in trouble, then all of Europe is at risk.

What's French for "Totally Screwed"? – Slate

Pay-as-you-go pension systems are not helping the debt problem

(pdf) Retirement pensions and sovereign debt in the euro area – DB Research

Strength of Swiss Franc: in addition, households across Hungary, Poland and Croatia have significant Swiss-franc debt, which has been weighing on domestic consumption

Trouble in Paradise – WSJ

FINANCIAL CRISIS

John Mauldin’s newsletter goes through the global macro situation. One of the few positives he sees is the Europe’s dysfunctionality, which does not make U.S. look that bad in comparison.

The Recession of 2011? – The Big Picture

Weekly commentary, this edition heavy on gold and Venezuela squeeze
(pdf) Things that make you go hmmm... - the trader

Good points, linked to relevant articles

Weekly Bull/Bear Recap: August 15-19, 2011 – Rational Capitalist Speculator

Basel III increased capital requirements are not met and banks cannot currently raise capital

Global Bank Capital Regime at Risk as Regulators Spar Over Rules – BB

Former Moody's Senior Vice President Accuses Rating Agency of Fraud, Corruption, and Greed – Mish’s

Goldman Cuts Q3 Growth Forecast In Half, Sees Q3, Q4 GDP At 1.0%, 1.5%, Presents Jackson Hole Event Walk Thru – Zero Hedge

Charting The Upcoming Recession, And Is Goldman Really Predicting A 2012 Year End S&P Range Of 700 - 900? – Zero Hedge

By flooding the system with cheap funding, people are “forced” into taking stupid decisions and many have been buying assets in a panic fashion

Cheap money, Broken markets and Stupidity – the trader

John Paulson interviewed by J.P. Morgan in March 2009, pointed out the superficially better, but structurally weak balance sheets of the financial sector.

Who Is John Paulson, And Why Should The Globe And Mail Care? – Zero Hedge

12 points that could happen

The Predictions of Michael Pettis – The Aleph blog

OTHER

BIS paper: increasing sovereign risk makes bank funding more difficult (duh)

The Impact of Sovereign Credit Risk on Bank Funding Conditions – via Alea

No, they can’t

Can VCs Time the Market? An Analysis of Exit Choice for Venture-backed Firms – The Review of Financial Studies

PE ratio and price sector charts

A Look at Historical Sector P/E Ratios – Bespoke Investment Group

EMERGING

Good luck to my readers in Croatia for tomorrow’s meeting with Mrs. Merkel.

Week ahead – beyondbrics FT

Sino-US financial imbalances bound to grow further - Beijing may end up holding full 1/3 of all outstanding US treasuries by 2015 – DB Research

DIVERSION

The world's most decadent hotel, where Dylan Thomas drank himself to death and rock stars bedded (and murdered) their lovers closes after a century – Daily Mail

Apple is worth as much as all euro zone banks - Reuters

Weekly Curated Linkfest For The Smartest People On The Web – Simoleon Sense

“For investors full of anger and fear, however, benign neglect might be the best they can muster.”

Too Flustered to Trade: A Portrait of the Angry Investor – WSJ