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| Foreigners buy the same amounts, so their share drops |
Summary: Yesterday I was complaining about a dull day. Steve Jobs is out. Greek bond yields rallying, bailout package in limbo, EFSF ratification show still in ahead. Legal trouble in U.S. on mortgage sector and in Germany on bailouts. Buffett buys into Bank of America, short selling bans extended in Spain, France, Belgium, Greece and Italy. There are tons of articles and spreadsheets on BoA/Buffett deal, but I’m not linking to any of that. Equities in Dallas.
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| TED Spread rallying. Source: Factset |
Joke of the Day: Europe has realized that it has no kindly-looking, ukulele-playing, no-income-tax-paying billionaire equivalent to bailout Intesa, SocGen, UniCredit, etc, etc, oh, and tomorrow, the short-selling bank is supposed to expire. End result: DAX flash crashes, and no rebound yet. – Zero Hedge
EURO CRISIS
ECB bond purchases, EFSF questioned
Lawyers Make Matters Worse for the Euro – The Source WSJ
Why yes, the Greek collateral grab is a big honking default risk – alphaville FT
2y-bond yields to 44%, a record high, because of the above
Meanwhile, Back in Greece… - MarketBeat WSJ
Emergency Liquidity Assistance available if needed, says financial daily Imerisia
For background reading, no new points, only accenting the German stance.
President of IFO Institute: “No other way for these countries to rebuild themselves than to insist patiently on a phase of debt discipline and an end to lax budget constraints.”
The Trouble with Eurobonds – Project Syndicate
15th Sep the court decides if bailouts of foreign countries by Germany is legal
German Court Wields Huge Economic Power – advisorperspectives.com
“The point is that the beatings will continue until morale improves, however long that takes.”
Short-Selling Bans Extended in Europe – Market Beat WSJ
Bans in effect until November 11th
Searching for Büffet – alphaville FT
Eurobonds could work, but we’ll probably never know – economistmeg.com
Working Paper
FINANCIAL CRISIS
Long and full of charts: foreign buying is not the driving the bond bull market – it is the Fed.
Who Is Buying U.S. Treasuries? – The Big Picture
“So AHMSI has just admitted that all of its foreclosures done with LPS were completed by the wrong party. In Alabama, wrongful foreclosures are subject to statutory damages of three times the value of the house, and recent cases have awarded much higher multiples of the property’s value.”
Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit – naked capitalism
“If you believe in the inflation force, the force will be with you. A.k.a. central bank mindtricks”
Jedi Economics – alphaville FT
Interesting look at the long-term stock market trends, discussing the merits of the recent Fed demographics paper vs. an older paper on the topic + market cap/ GDP charts
A stock market bottom at the end of this decade – Humble Student of the Markets
Roundup of what other bloggers are and were saying and Mish’s own opinion
1. Monetary policy not enough, 2. Don’t assume structural problems are cyclical, 3. Fix the banks, 4. Future is not like past, 5. Embrace globalization, 6. Don’t wait
Six lessons Japan can teach the West – The Curious Capitalist TIME
DIVERSION
Bernie Madoff Under The Impression That Harvard Plans To Teach A Course Based On His Legitimate Years – DealBreaker
Pentagon’s report, amid tensions over American support for Taiwan, cyberattacks blamed on China, and Beijing's territorial claims in the South China Sea
“military posture is entirely defensive, Washington engaged in scaremongering”
Double-amputee runs 400 meters in 45.07 seconds, qualifying for world championships and next year’s London Olympics. He began sprinting in January 2004 after sustaining a knee injury while playing rugby.
Running foul? – Babbage The Economist
Warren got the idea to buy into BoA in a bathtub. He has a history with bathtubs.