Summary: Short post now, as yesterday I posted so much. For new visitors, a good place to start is my new weekly post Best of The Week. Slovakia’s vote on EFSF coming soon, the last country to ratify the pact. Here’s some older background reading: The Economist, WP, Spiegel, Reuters, FT
Yesterday I wrote an email to Richard Sulik, the main opponent in Slovakia to EFSF ratification: Thank you for being a man and a patriot of your country. Maybe you can save my country's public finances, as our own politicians are not up to the task. Please help our country by trying your utmost to convince the parliament to vote no. For your sake, for our sake, for the whole Europe's sake.
Slovakian EFSF schedule:
9am - the Prime Minister meets leaders of four ruling parties to inform them of her next political move
10am - the leadership of the SaS party holds an internal debate
13pm - the parliamentary session on EFSF expansion begins
The Steve Jobs page has been updated, buy the coming biography Steve Jobs by Walter Isaacson. Read my and others’ comments on the excellent book Red-Blooded Risk and buy it – you have 20 seconds to comply. Feedback is appreciated: leave a comment, follow me on Twitter, Facebook or email me
Today’s headlines (Mon evening) – Between The Hedges
Tuesday Watch (Mon late night) – Between The Hedges
News That Matters (Tue morning) – The Trader
FX options: Vols, Risk Reversals & Pin Risk – tradingfloor.com
TV: Bloomberg, CNBC, BBC World News
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
Eurozone crisis: Live blog – The World / FT
EURO CRISIS
Slovak Domestic Politics Stall Euro Zone Bailout Plans – The Source / WSJ
“Unless the libertarian Freedom and Solidarity, or SaS, party, the chief EFSF opponent in the four-party coalition government of Ms. Radicova, makes a last minute turnaround, the Slovak parliament won’t endorse the bailout fund Tuesday. But it will likely do so later with the support of the pro-EFSF opposition which, however, seeks concessions from the cabinet and a roadmap for the early election.”
Slovak government hangs by a thread ahead of crucial EU vote – euobserver.com
“The SaS's two conditions - veto power over any disbursement of the EFSF money and Bratislava staying out of the future European stability mechanism (ESM)”, previously: Slovakia poses increasing threat to EU bail-out fund
German push for Greek default risks EMU-wide 'snowball' – The Telegraph
“Critics say Germany is making a policy blunder by treating the crisis as a Greek morality tale, losing sight of EMU's deeper structural woes. Portugal is as vulnerable as Greece, with higher levels of combined private and public debt and an equally large trade deficit. Spain is still in the early phase of its housing bust. Italy has lost 40pc in unit labour competitiveness against Germany since 1995.”
Banque de France turns a blind eye to European financial crisis – The Telegraph
“the reality is that Mr Noyer messed up on a major scale by failing to insist that French banks recapitalise during the brief window of opportunity that existed a year ago when share prices were still riding high.”
Iceberg spotted, summit convened – Free exchange / The Economist
Even a promise to act on the banks is an advance. Open questions: bank rescues at national or pan-European level, what capital level to target, what kind of capital to inject. Pan-European oversight of banks would make sense, but Britain will oppose.
CHINA
Gavekal Dragonomics is bullish
“Credit growth is the number one predictor of financial crises according to a 37 year study by the NBER. China’s credit growth is off the charts and magnitudes higher than the US at the height of tis bubble. This trillions and trillions of debt will go bad, taking down all types of firms that have ventured out of core businesses to speculate in real estate, or lend to speculators in real estate.”
OTHER
Behold the dangers of contaminated collateral – alphaville / FT
“The authors hypothesise that when these types of collateral markets exist, no useful information is created because it’s too costly (at least for market participants in the short-term) to do so. Thus there’s no information that can help one distinguish between good and bad collateral — between Scandinavian government bonds, say, and AAA-rated sub-prime mortgage bonds.”
From crisis to constitution – voxeu.org
What happened in Iceland, where a “pots-and-pans” revolution in response to the devastating financial crisis gave rise to a new constitution.
The Most Disruptive Companies in Tech – The Big Picture
Large infographic