22nd Aug EARLY - Germans say no to eurobonds

Summary: stocks down in Asia & Europe, strong no to eurobonds from Germany – a poll showed 76% of voters against and 15% in favor. Ban on shorting not working, and probably will not be renewed. Today’s links are heavy on the euro bonds. 

Views: bear leg on in stocks. Greek bond yields and CDS prices have been pushing up recently, and given how they have failed in austerity plus calls for collateral breaking up the already linedup bailout tranche, I'm expecting bad news. Epic fail-time soon?

EURO CRISIS

Short piece: eurobonds will not work, and are not politically possible

Eurobond points – Marginal Revolution

Merkel Says She Will Resist Market Pressure for Common Euro-Region Bonds – BB

Van Rompuy Opposes Common Bonds Until Euro-Region Budgets Converge Further – BB

Schaeuble Says Common Bonds Would Create ‘Inflation Community’ – BB

Nice look at the political background of the euro and low probability of eurobonds

Germany forced to make a choice: Us or them? - MarketWatch

Greece Avoids Bank Run By Last Minute Bail Out Of Proton Bank – Zero Hedge

CB’s marketcap is now below 10bn, German government put 10bn into it in 2009

Is Germany's Commerzbank in Need of Another Bailout? – Mish’s

From Between the Hedges, German headlines:

The German Finance Ministry: Eurobonds would cost Germany in higher interest rates as much as $3.6 billion in the first year and double in the second, in the tenth year, the extra costs would reach 20 billion euors to 25 billion euros. – Der Spiegel

Head of CSU party (in coalition with Merkel’s party): opposes eurobonds. CSU turned a blind eye to ECB bond purchases, but won’t collectivize debt – Wirtschaftswoche

Merkel’s economic adviser: rejects eurobonds (short-term relief and long-term problems), would cost Germany's taxpayers a two-digit billion sum  – Euro am Sonntag

Economy minister: no to Eurobonds as long as the current coalition government is in power. Higher interest rates to Ger, threaten growth – Bild am Sonntag

Merkel’s party member and premier of the state of Hesse: financial transaction tax depends on it also being applied to U.K. Tax would threaten more than 70,000 jobs in Frankfurt – Passauer Neue Presse

Head of IFO institute: no to bonds, pooling does not decrease debt burden, everyone must pay their own debt - Handelsblatt

FINANCIAL CRISIS

The global crisis of institutional legitimacy – Felix Salmon Reuters

Full research piece on scribd from Aug16th

The Convulsions of Political Economy – UBS Investment Research

Wall Street Aristocracy Got $1.2T in Loans – BB

Visualizing What $1.2 Trillion In Secret Fed Bailouts To The Banking Kleptocracy Looks Like – Zero Hedge

Merkel-Sarkozy meet, other leaders do not even mention the massive housing bubble, fuelled by spectacularly dodgy banking, recycling a massive trade surplus, that led to a huge recession

This economic government is neither economic nor government – A Fistful of Euros

Some preliminary thoughts on Bernanke's 2011 Jackson Hole Speech – Calculated Risk

Goldman's Jim O'Neill: "2008 All Over Again?" – Zero Hedge

Worth reading, the good, the bad and the ugly points of the previous and current week

Weighing the Week Ahead: Good News from Jackson Hole? – A Dash of Insight

No end in sight

FDIC Bank Failures – The Big Picture

IceCap’s monthly newsletter

It's Not A Free Market, It's Not A Controlled Market, It's A Gong Show Market – Zero Hedge

OTHER

Most viewed entries since the blog started in Aug 2009

Our Top 10 Posts – iMFdirect

Wising Up to the Rising Costs of Aging Populations – iMFdirect

Full research piece on scribd

US Weekly Kickstart – Goldman Sachs