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Sunday, September 18

18th Sep Weekender: Euromeet gone, Greece going

Summary: Moody’s did not downgrade Italy, but the downgrade is in the works. Nothing of substance announced during the weekend’s meeting, but Greece’s situation is looking really bad – prime minister turned his flight to Washington around and returned to Athens on Saturday, after a chat with his finance minister. FOMC next week. The UBS Rogue Trader-post has been updated.

From Friday evening
Today's Headlines – Between The Hedges

Summary of this week’s events, rated plus or minus.
Weekly Bull/Bear Recap – Rational Capitalist Spectator

Country-by-country list

Euro cannot survive in present form, eurobanks grossly under-capitalized, in 2008 governments could sort out banks, but now both have problems, EFSM not enough and substantially more required”

Dismal Optimist-letter: “What Europe should do”
** The Coming Age of Defaults – The Big Picture

Choices: a) Support euro at all costs, does not work, leads to c. b) orderly default of Greece c) split into two euros. Also other interesting discussions.

Banking liquidity vs. solvency – Humble Student of The Markets

“Expect no euro-TALF, more muddling through, crisis worsens”

“debt problems can be solved through bailouts or default. By promising bailouts in return for fiscal austerity, governments have been pushed toward the prospect of socializing an unbearable amount of private debt.”
The ECB’s Moment of Decision – Project Syndicate

Who will pay – creditors or debtors? Taxpayers or government employees? Germans or Greeks? What is politically tenable?
Europe’s Lehman moment – The Great Debate / Reuters

The newly discovered debt of Madeira is 0.3% of Portugal’s GDP is a good example on how Eurobonds are a dead idea.
Rogue island – alphaville / FT

Weekend meeting
“I'd Like To Hear How The United States Will Reduce Its Deficits ... And Its Debts”

Citi´s full research piece included

PM turned his flight to U.S. around, returned to Athens

Year-old collection of posts discussing the history and future of sovereign defaults
** Repeat: Sovereign Debt Series – Calculated Risk

Maybe buy more long bonds, eliminate reserve interest rate, bond yield ceiling, buy European bonds (would also weaken dollar), higher inflation target, loans to private sector
** Forget Operation Twist: Rosenberg Says Bernanke Will Shock Everyone With What Is About To Come – Zero Hedge

The UBS rogue event came at a convenient time.

ETFs - you were warned – Terry Smith