Google Analytics

Tuesday, August 2

2nd Aug LATE - more of the same

Summary: more bad macro news, everything down, euro situation getting worse. My guess that markets are wary of 76-level in JPY/USD because of previous intervention at that level was confirmed by Citi’s research. CHF’s rally has failed to pause against my previous view.

View: Unchanged – read previous posts. More weakness (and lots of it) in equity markets and euro end game in full swing. Bearish EURUSD, Brazil’s equity markets falling off the cliff. Given the pause in JPY safe haven buying, CHFJPY might be an interesting pair to trade this week. FOMC meet coming in Aug 9th, and Helicopter-Bernanke has to get back in action. See the picture

Joke of The Day: "Translation of EU statements: We are scared completely s***less by these events. If we were not scared s***less, there would be no need to comment at all.” –


Euro-Zone Debt Woes Get Messier – MarketBeat / WSJ

“Odds are good, however, that once again the prevailing system will break down. And the end of the euro zone in its current form won't be pleasant at all, in the short term anyway.”
That 30s feeling – The Economist

Charts of 5-year CDS’s. France rising nastily, not to mention the PIIGS
European Default Risk Spikes – Bespoke Investment Group

Tables of sovereign CDS wideners and highest default probabilities

“..there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation.”
The Second Great Contraction – Rogoff / Project Syndicate

So, as promised, talk about the QE3 increases

Roundup of views of if and when S&P lowers U.S. rating, and what happens after
What *will* you do, S&P? – alphaville FT

Canada’s housing now at a comparable level to the U.S. bubble top

“Bond traders think this deal stinks for the economy and what they see is an anemic economy.  It’s that simple.”

Down 20% from the beginning of the year. Table with the size of previous bear and bull runs.



Equity Risk Premium Book Learning – CXO Advisory Group

A copula to link correlation skew to systemic risk.