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Thursday, September 1

1st Sep Late - Feta topping

Remember the summit in July? Markets don't.
Summary: Whole world vs. Eurocrats in denial continues. Spanish bond auction went miserably, talk of Greece utterly failing to meet fiscal targets. French banks under fire. Read today’s earlier linkfest for more, and follow me on Twitter!


Marking sovereign bonds to market would reduce bank equity by €200bn = 10-12%, shows draft of IMF’s Global Financial Stability Report, to be published in three weeks.

UBS’s report: French banks are particularly vulnerable to funding problems. Central banks provide funding, but confidence is gone while costs are up.

“The debate should be just how "Gadaffi" the Eurocrats go in defending what they see as theirs. They may well end up holed up in Brussels (like Sirte) denying the obvious and fighting to the death.”

Interesting point from Citi: in addition to ‘bond vigilantes’, there are powerful ‘equity vigilantes’.
Battle of the vigilantes – Buttonwood’s Notebook / The Economist

French politics at its finest

Citi’s and UBS’s response to the upcoming report from Independent Commission on Banking
ICBaiting – alphaville FT

“Take account of true stress correlations”

Revisiting Capital Controls, Capital Flows and Financial Stability, Q&A on Post

Order book spoofing, FSA took it to court
Algos & Demons – alphaville FT

Seeds of a revolution – Humble Student of The Markets