Google Analytics

Tuesday, August 9

9th Aug LATE – before the Fed press release


View: Keep the Brazil short.

Joke of the Day: “The Commanding General is well aware the forecasts are no good.  However, he needs them for planning purposes.”
- Kenneth Arrow, Nobel Laureate Economist, recalling the response he and colleagues received during the Second World War when they demonstrated that the military’s long-term weather forecasts were useless.  Via World Beta


EURO CRISIS
ECB’s Trichet and successor Draghi sent a letter to Italian government urging faster spending cuts, overhaul of Italy's labor rules and liberalization of businesses

RBS on the ECB’s bond buying: even though periphery spreads tightened, bank stocks were hit, suggesting only a temporary and artificial effect. Evolution Securities believes that key is coming bond auctions – can Spain and Italy sell bonds at the narrower spread?
What price, sovereign risk? – alphaville FT

Nomura: damage to the ECB balance sheet can be assumed to be a cost mainly for Germany and France to pay. Citi: France’s CDS widest of any AAA country, underpins the EFSF’s AAA rating.

Very good read, written mostly around comments from RBS, Barclays, Commerzbank, ex-ECB people.




FOMC FATCH


FOMC Meeting Thoughts – Calculated Risk

What the Fed should do – Ezra Klein WP

The Fed’s Stuck – The Source WSJ

Dr. Feelgood back in town?! – The Big Picture


OTHER (LONG-TERM STUFF)
Bad demographics, little external demand for Jp-bonds. How do they roll them in the future? They need the trade balance surplus for that. What happens when the rest of Asia eat away Japan’s surplus?



OPERATORS





DIVERSION (again, literally)
Nomura’s Riot special
Anarchy in the UK – alphaville FT