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| van Rompuy spoke to the UN |
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| Source: oftwominds |
The “news” coming out of the mouths of the bureaucrats is not encouraging. Seems like there is no agreement on how to solve the crisis. The means to solve it are limited and all choices boil down to pain. Pain can be faced in the short run or the long run and shared by all or only some. The bureaucrats would like to avoid pain, and if possible, kick the can.
Mr. Market would prefer
seeing pain in short run to avoid doubts that the long run pains are again later kicked down the road. It would also be preferable to see the pain shared not only justly (guilty ones get hurt more to decrease moral hazard) but also realistically (those that can afford it). It would be a good start if Sarkozy would lose his sense of importance. The mess is to a large extent of French origin, and all the others are trying to sort out their mess. Little humbleness would not hurt France, but of course it would hurt his presidential campaign. Only Sarkozy cares about his personal ambitions, but if he insists for much longer, not only Sarkozy, but French interests as a whole could be stonewalled. Anyways, until the ECB becomes involved everything else is just peeing in one’s pants in the winter – or even worse. During the weekend I put out a collection Best of The Week and Weekender, full of links to comments and analysis on the Euro Summit plus the usual week ahead/week in review-stuff. Follow “MoreLiver” on Twitter, Facebook or email me.
Joke of the Day: You have lost a good opportunity to shut up. We are sick of you criticising us and telling us what to do. You say you hate the euro and now you want to interfere in our meetings. – Sarkozy to UK’s prime minister euobserver.com
Joke of the Day 2: Didier Reynders, the Belgian finance minister, left early to attend the world premiere of the new Tintin film.
Rumor/Idea of the Day: Euro A countries will be restricted in their abilities to tax and spend and if targets are breached they will be relegated to Euro B status. Euro B countries will be given 3 years to "get their acts together". If they do, they become Euro A again. If they fail, they will have to leave the Euro. Fintag
News (Mon morning) – BTH
News (Mon morning – The Trader
Danske Daily – Danske Bank (pdf)
FX option vols – Saxo
TV: Bloomberg, CNBC, BBC World News
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
Taking over the European Central Bank puts Mario Draghi in a position as perilous as Europe’s – The Economist
The euro zone is integrating to save itself. But it will suffer if it excludes the others – The Economist
The Irish Lesson, or: it’s Competitiveness, Stupid! – Kantoos Economics
At its core, the euro area crisis is about economies’ ability to adjust within a currency union, or put differently: about the member countries’ capacity to behave in a euro-compatible manner.
K points out the circularity of the plan, the need for ECB backstop and: The whole euro system was designed to fight the last economic war. It’s a Maginot Line built to prevent a replay of the 1970s, which is worse than useless when the real danger is a replay of the 1930s.
More Grim Euro Thoughts – Krugman / NYT
Grim news from Greece, ECB demands more of the same, EFSF leverage probably only destroys the AAA ratings, only working solution would be ECB involvement and that is the least probable thing we will see.
It Can’t Happen, It’s a Bad Idea, It Won’t Last: U.S. Economists on the EMU and the Euro, 1989-2002 – EJW
Paper from Jan 2010 by two eurocrats on why the euro is seen as a mistake – and find it surprising. Great stuff, clowns…
How to exit the eurozone, or Lord Wolfson, how about fifty quid for a blog post? – Marginal Revolution
THE SUMMIT
Where we stand ahead of Wednesday’s EU Summit – BNY Mellon
Ok roundup.
An underwhelming summit unveils the dead euro-parrot – Humble Student of The Markets
Ok roundup, summarizes and links to further readings
Euro-Zone’s Leveraged Solution to Leverage – Wilmott
Problems: EFSF does not have 440bn, must borrow from markets, ECB is leveraged, the 20% first loss position may be too low, the circular nature of the scheme is surreal
GREECE / ‘PERIPHERY’
My European Nightmare – An Infernal Hurricane Gathers? – naked capitalism
Philip Pilkington: the document leaked from within the structures of Europower strongly suggests that the Eurocrats know exactly what they are imposing on the periphery…the game-change is then sure to come from within the periphery countries.
Most Greek bailout money has gone to pay off bondholders – WP
More than half of the money lent to Greece so far by the IMF and European nations has gone to repay bondholders, a transfer of billions of dollars from taxpayers around the world to European banks and pension funds that invested in the troubled Mediterranean nation.
No wonder the IMF and the banksters don’t want Argentina to get good press. The Eurozone countries they are wringing dry might get ideas.
Who Needs Stability? – NYT
Bankers opposing Dodd-Frank and Basel 3.
European exposure lowest for a long time, scribd link to full doc from 20th Oct.
CHINA
OTHER
Things that make you go hmmmm – Grant Williams (pdf)
Market newsletter with multiple topics
Earnings Season Strategy – HistorySquared
Buy stocks reporting in first half of Q and short those reporting in second half.
Exploratory Hedge Analysis – Quantivity
Graphical exploratory data analysis for proxy hedging using classical statistical techniques: the fine texture of the real world differs from both mathematical formalisms and standard mental models. Indeed, alpha hides in the divergence between model and reality.
DIVERSION
A Curated Linkfest For The Smartest People On The Web – Simoleon Sense