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Thursday, September 1

1st Sep Extra – A trillion here, a trillion there

Summary: Today’s third linkfest! If euro crisis is your soup, skim the earlier posts through, some very nice links there. I put Stiglitz’s article on Bush wars in Financial Crisis, because it belongs there.

Rogoff: IMF has always been too quiet and kind before it is too late. Now it opened its mouth on Europe. Does it have the nerve to press the issue and demand the eurocrats to solve the problem?
Will the IMF Stand Up to Europe? – Project Syndicate

Scribd link via HistorySquared: issues pushing and pulling the ECB

EFSF acceptance process in Germany, strong attempts to weaken parliamentary control

Citibank’s 24-page research note published next Thursday. One point: “the price of any bail-out may be brutal dilution of bank equity holders”

Very short, a piece from today’s commentary by Morgan Stanley: most probably Germany decides it is cheaper to bail out German banks - instead of the PIIGS governments and banks.
Europe: Hanging by A Thread – Alchemy of Trading

Nasty summary of the current fiasco. Links from the article lead to crap

A look at a recent IMF paper “Possible unintended consequences of Basel III and Solvency II”. Both B and S put the capital requirements on AAA-risk too low, and that’s one reason we’re in this mess.
When Solvency met Basel – alphaville FT

Potentially very large trouble. Don’t think money market funds are riskless.

Stiglitz: price of wars trillions of dollars, still coming disability pays, war trauma, collateral damage (divorces etc), suicides. Total cost of wars per U.S. households an estimated $23,000, America’s military, economy and fiscal weakened for a generation. “It pays to think before acting.”  
The Price of 9/11 – Project Syndicate

Nye, former assistant secretary of defense, talks about “one trillion or more”, but finishes with Eisenhower’s advice: “Do not get involved in land wars of occupation, and focus on maintaining the strength of the American economy.”  
Ten Years after the Mouse Roared – Project Syndicate


Very nice long-term charts, discussion and further links.

Click on the charts, and on the larger pictures there are buttons on top to switch the P/E type