24th Aug LATE - Dull

Higher food prices are soon followed by recessions. Source

Summary: Dull day.

Quote of the Day: - What you should really do with your money is watch me. That is, watch what the baby boom does. We baby boomers have caused everything since 1946. We’ll keep buying stocks until we retire. But when we hit sixty-five, we’re going to sell stocks. And the stock market will go down. And we’re going to wet ourselves. The math is simple: 1946 + 65 = 2011. Buy stocks until 2011, and then buy Depends. – Eat the Rich, P.J. O’Rourke 1999

EURO CRISIS

Handelsblatt has received a leaked a document from the German Finance Ministry on EFSF expansion. First the original, and then Google English translation.

Roundup

ECB faces showdown over government debt – WP

“The discussion is no longer about dropping the demand for collateral, just changing its structure.”

There are many ways to grab Greek collateral – alphaville FT

Counterparty Risk Soars To Highest In Over A Year, European CDS Sliding, LIBOR-OIS Spikes, High Yield Spreads Blowing Out, Overnight ECB Lending Soars – Zero Hedge

With commentary from Goldman Sachs

Euro Bank CDS Surge To All Time Record After Collapse In German IFO Business Survey, Discord Over Eurobonds, Greek 2 Years Over 40% - Zero Hedge

ECB’s marginal lending facility shows an overnight increase of €2.8bn, but USD swap line untouched – perhaps after last week’s €500 mio caused so much noise.

ECB turbulence – alphaville FT

FINANCIAL CRISIS

Today’s must-read: “How QE2 went wrong”

An important lesson from Jackson Hole 2010 – alphaville FT

“Real Capitalists know failure is part of the process. I suspect we may have another chance at a banking reorg. Let’s hope we do it correctly this time…”

Big Banks: Under-Capitalized, Overexposed, Opaque – The Big Picture

High food increases are often followed by a recession. Prices are again up.

Food Prices and Recessions - HistorySquared

“Comments on the report are invited from all interested parties and should be sent by 23 Sep”

Report on OTC derivatives data reporting and aggregation requirements - BIS

OPERATORS

SG Cross Asset Research’s slides on HF’s net positions in ALL asset classes

Downside Hedge Fund Bets On S&P500 Highest Since 2008 – Zero Hedge

More on the Opacity of Bank of America’s Financial Statements – naked capitalism

DIVERSION

“Always ask of such data “what is the question to which this number is the answer?””

Sex, lies and pitfalls of overblown statistics – John Kay

Prime lair location, henchmen can be put to Connecticut (sorry, UBS did it already)

J.P. Morgan’s Fortress, Long Vacant, Looks For Upscale Tenants - NYT