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| Source: NYT |
Now even Belgium has trouble selling treasury bills. The deeds of the elderly have followed us into the sanctity of our homes. It is already all over unless the ECB starts printing.
Quote of the day: I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it. So they have to act now. – Willem Buiter, Economist at Citigroup
News (Wed evening) – BTH
Recap Nov-16 – Global Macro Trading
Morning Briefing 16-Nov – BNY Mellon
With no sign of any weakening of the forces driving events in northern and southern Europe the outlook for the region is deteriorating rapidly
FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
Pandora’s Box – The View from the Blue Ridge
It is remarkable how closely Greece is following the Argentina experience. The charts below are from JPM’s Sovereign Default Time Capsule. Note that in each case, IMF and other bail-outs did not end the crisis. Without a devaluation, short-term fixes and bridge loans do little do solve underlying structural issues.
Euro crisis is spreading from periphery to center: the system designed to fail will fail – L. Randall Wray / EconoMonitor
Greater integration of Europe—commercially, culturally, socially—did not require it. And it is the EMU that is now tearing Europe apart. Time to abandon the failed experiment?
Games of Chicken – Tim Duy’s Fed Watch
More pressure to introduce QE in the Euro Zone – Kiron Sarkar / The Big Picture
Pressure Heaps on the ECB – The Source / WSJ
Stocks Making Risky Bet on Massive ECB Money Printing – MarketBeat / WSJ
The euro crisis is not a simple story of Greek sinners and German saints. In fact, imposing austerity on the eurozone's periphery alone will accomplish little. To save the continent, its richer countries and private investors must share in the sacrifice.
Running through Italian default scenarios – Credit Writedowns
Bunds get Junckered, and other repo dysfunctions – alphaville / FT
Germany’s debt level is a “cause for concern,” Luxemburg Prime Minister Jean-Claude Juncker told the General-Anzeiger newspaper. “Germany has a higher debt than Spain”
Germany’s debt level is a “cause for concern,” Luxemburg Prime Minister Jean-Claude Juncker told the General-Anzeiger newspaper. “Germany has a higher debt than Spain”
The naked derivative exposures of banks to sovereigns – alphaville / FT
or the sovereign CDS feedback loop.
or the sovereign CDS feedback loop.
Nomura analysts observed “breaking points” in the form of margin calls and ratings downgrades, which (in the case of margin calls) led to a perfect storm for Italian debt last week.
The euro crisis: The ECB must be LOLR, ASAP – Free exchange / The Economist
Prepare the printing presses – alphaville / FT
Low inflation report for November will lead to more QE by Bank of England
Low inflation report for November will lead to more QE by Bank of England
If you tolerate this, then your T-bills will be next – alphaville / FT
(Belgian) yields on both the three-month and 12-month paper sold reached three-year highs. More to the point, they rose to these highs out of the blue compared to recent trading. The auction’s minimum target amount (€2.7bn) was also barely reached
(Belgian) yields on both the three-month and 12-month paper sold reached three-year highs. More to the point, they rose to these highs out of the blue compared to recent trading. The auction’s minimum target amount (€2.7bn) was also barely reached
Swedish Vengabus – Macro Man
Now that Finland’s bonds have been sold off, even though it is the only country meeting Maastricht criteria, end game is near. Sweden is a leveraged play on European growth, and the current view of it as a “safe haven” is wrong. Opportunity for a trade.
EU clampdown on ratings agencies defeated – euobserver.com
Overall, the program is off to a good start. However, its success crucially depends on continued implementation of a wide range of structural reforms
CHINA
Book review: Chinese official statistics – fact or fiction? – beyondbrics / FT
OTHER
The Russian Default – What Happened – Pragmatic Capitalism
In the Matter of Lehman Brothers – Part 2: Well Structured Messes – Satyajit Das / EconoMonitor
In this two part paper, the issues regarding settlement of complex derivatives arrangement revealed by the failure of Lehman Brothers is outlined.
FX Forecast Update Nov 2011: De facto zero rates to weigh on euro – Danske Bank (pdf)