News (Mon morning) – BTH
Danske Daily – Danske Bank (pdf)
FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
Decision Time For Europe: The Definitive Presentation On The Future (Or Lack Thereof) Of The Eurozone – ZH
Swiss private bank Pictet’s research paper: Current response to the crisis has created conditions leading the euro area towards depression…things are going to get worse before European authorities decide to wheel out their heavy artillery.
Swiss private bank Pictet’s research paper: Current response to the crisis has created conditions leading the euro area towards depression…things are going to get worse before European authorities decide to wheel out their heavy artillery.
The Euro Is Dead – ZH
Nomura’s research note: the euro area as currently constructed is not stable and so it will have to change, any new variable geometry euro will take a long period of time to set up. How then to cover the intervening period?
Nomura’s research note: the euro area as currently constructed is not stable and so it will have to change, any new variable geometry euro will take a long period of time to set up. How then to cover the intervening period?
Bundesbank's Jens Weidmann Discusses The ECB's Role As An Overthrower Of European Rulers, Bashes EFSF Incompetence – ZH
after all it took the ECB's bond buying program - the SMP - just two days of not buying Italian bonds for Silvio Berlusconi to resign after BTPs hit an all time rock bottom price…
after all it took the ECB's bond buying program - the SMP - just two days of not buying Italian bonds for Silvio Berlusconi to resign after BTPs hit an all time rock bottom price…
RCS comments the above interview: Germany is staunchly against printing. But the ECB must in order to avert catastrophe. I think the market will begin to impose its will on the Bundesbank in the near future. Will the Bundesbank blink, or will Germany just leave the Euro? It really comes down to this question. – Rational Capitalist Speculator
Very good critical outline of the program: In case Italy and Spain need money, 30% of the guarantors would “step out”, at which point the self-insurance scheme collapses
Hokey Pokey – Hussman Funds
1) A European Federal System or 2) dual currency system by indebted countries or 3) Germany adopts dual currency system (‘nuclear’ option): In short, if you can't save the euro by restructuring the debt of the weak members, or by having the weak members leave, or by having the fiscal costs fall squarely on the German people, the remaining option is for Germany to leave, inflate the heck out of the euro to deal with the debt problem, and reinstate Germany on post-devaluation terms.
Euro Crisis: Where Is The ECB? EFSF Buying Its Own Bond? – Also Sprach Analyst
Nomura has offered the some interesting perspective from game theory, explaining why the ECB is so reluctant (besides that it is “not in the Treaty”):
GDP growth rate critical – if interest payments below growth, debt/GDP falls. If not, primary budget surplus is the only solution.
Breaking up the eurozone is hard but not impossible – economicsuk.com
There is no doubt that the short-term consequences for countries leaving are serious… I cannot believe it is impossible, however, particularly if the alternative involves struggling along with a flawed system.
Where is the ECB Printing Press? – John Mauldin / Big Picture
But the choice is print or let the euro perish. I see no other realistic solution, aside from massive austerity, willingly accepted by Europeans everywhere, along with the nationalization of their banks, etc., as described above. I think there is even less willingness to endure all that.
Can political change in the euro zone solve the debt crisis? – The Curious Capitalist / TIME
In the end, no matter who might be running the governments in Rome, Athens or Berlin, European leaders will have to answer for their choice of the government of the euro over the government of the people. They might come to regret it.
Weekend reading-things that make you go “hmmm” – The Trader
…as one-by-one the formerly ‘strong’ countries get dragged into the maelstrom of the peripherals leaving a new country exposed on the outer fringes of the ‘core’, it becomes more and more obvious that somehow, some way, Germany has to find a way of justifying an action that is anathema to the citizens of Europe’s powerhouse economy.
OTHER
Mental Model: Conjunctive and Disjunctive-Events Bias – Farnam Street
Why are we so optimistic in our estimation of a projects cost and schedule? Why are we so surprised when something inevitably goes wrong? Because of the human tendency to underestimate disjunctive events.
Macro Update – November 2011 – Shadow Capitalism