Shorter post for now: S&P downgrades 37 banks, EFSF admitted (sort of) as a failure. I like the latest journalistic heroism from Bloomberg revealing how much support the Federal Reserve actually gave to the banks during the 2008 crisis - the unwillingness of the central bank to give out the details and the reasons they gave for their reluctance was ridiculous.
If someone asks and needs a bailout, of course it should be an embarrassment to the deadbeat. Of course Fed should explain and tell what they are doing with the public money. The funny thing about democracy is that the more political something is (like who is going to be bailed out and who is not), the less democratic and transparent the process becomes. For the past few weeks oil prices have been relatively strong, especially given the risk off-decline in other assets, and no wonder: Iran, Syria, Iraq, Afghanistan and Pakistan look really like Trichet had stabilized them. Add to the explosive (sorry about the pun) mix Israelian, Chinese, Russian and American ambitions and a soap opera second only to the EZ crisis is in the making. The crude oil correlation with the S&P is thus breaking down for now.
Quote of the Day: “I think the ECB is going to fold on the QE part. Give it another two, three months and they will fold. Ultimately doom the Euro-zone, of course, but probably buying another 18 months for this... this... thing.” – Anonymous 19-Nov
Market Preview (30-Nov) – Saxo Bank
Morning Briefing (30-Nov) – BNY Mellon
FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
Maximising EFSF’s capacity approved – EFSF
EFSF expansion agreed (to be inadequate) – alphaville / FT
The EFSF: Unfinished business – voxeu.org
The European Financial Stability Facility was set up eighteen months ago as a response to the then Greek sovereign debt crisis. This column looks at the effect of the fund on the financial system in particular bank shareholders, the holders of bank bonds, and the holders of sovereign debts.
Euro zone ministers agreed to ramp up the firepower of their rescue fund, but couldn't say by how much, and may turn to the IMF for more help as a stunning leap in Italy's borrowing costs pushed the region closer to financial disaster.
More Europessimism – Tim Duy’s Fed Watch
We are setting the stage for a massive counter-example to the US reaction to its financial crisis…if you think the US would have been better off shrinking the deficit while letting the banking system collapse, it is time for you to go long on Europe.
DIVERSION
Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress – BB
The stuff Fed tried to keep secret, because otherwise in the future “those in need of bailouts would be embarrassed to ask for it”. Definitely something for the eurocrats to think about, as in the game it is now their turn.
Occupy Wall Street: A Wall Street Stock Broker Speaks Out
Alexander Efros occupies WS in a different way – by interviewing a stock broker on what he does and how. No news for market veterans, but still somewhat entertaining to hear about the sale techniques.
Kennedy, Reagan, Loved for All the Wrong Reasons – Op-ed / BB
One great drawback of American democracy is the difficulty we have accepting that every country -- however blessed with great resources and a generally well- functioning government -- suffers some economic and social ills.
XXX-Ratings May Save Us From Financial Armageddon – View / BB
Then it hit me. The world of finance should become more like the movies, with a rating system that actually makes sense.
Then it hit me. The world of finance should become more like the movies, with a rating system that actually makes sense.
A Story About ‘Magic' – catb.org
Hacker folklore. A switch on computer stating ‘magic’ and ‘more magic’. What is it?
The Man Who Busted the ‘Banksters’ – Smithsonian Magazine