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Monday, August 29

29th Aug EARLY - Gameplan changed, or end of the world?

EURUSD is happy higher. Breakout coming?
Summary: Huge amount of material to read, even after the two updates during the weekend. European situation is escalating: EFSF trouble, euro interbank crisis, and strange rumors that forced increase of eurobanks’ capitalization is in the works. I added a new subpage "Best", I'll put some of the more timeless and more interesting links from the daily posts there.

Views: Maybe the rumors were leaked to test the idea, and against that backdrop the recent uptick in EURUSD could be explainable. Currency pairs over the past few weeks have suggested we are not anymore in the "risk-off" mode, but at the same time stock markets have not rallied. Either the correlations are breaking down, or the best the bond- and stock markets can do in "risk-on"-mode is to stay unchanged. So it's either a catastrophe waiting to happen or the game plan has changed.

Without citing sources, Sunday Times said officials from the ECB and EC are considering offering central guarantees over certain types of debt issued by banks.
Barclays looks at data and suggests that bank funding trouble is NOT contained to only few names. The banks have just been careful not to go after more expensive funding – but that cannot last forever.

European debt crisis worse, banks in problems, money markets seizing up. “This time it will be different”, as there is not enough money to bail out everyone.

On Sep 23 Germany votes on the EFSF expansion

“Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe's revamped rescue machinery, threatening a consitutional crisis in Germany and a fresh eruption of the euro debt saga.”

Very good roundup by the author of “Europe on the Brink”.

Nasty: Trichet was saying nothing important on anything important at Jackson Hole

Probably not worth your time, main point is that ECB has been too hawkish all the time.
Europe’s Big Mistake – The New Yorker

Roundup of the Jackson Hole meeting

Highly recommended bullet point list. There is not a single point here that I would disagree with.

An article on Washington Post after the Buffett’s bailout of BoA. Suggestion is “Go Swedish”

Trade did not remain as open as is often suggested – and this points to increased dangers of protectionism if crises escalate.

Banks officially complain about the planned capital requirement increases – my view: there is no limit how evil and full of moral hazard the banks can be.

Goldman Sachs’s weekly charts package is definitely worth a look.

Most of the so-called software companies are actually something else
The “software company” bubble – This is the Green Room


Summary of HSBC’s report “Can Asia Save the World”


Interesting way to chart an industry – worth checking out
Mobile phone market dynamics – Can Turtles Fly