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| Source: ThomsonReuters |
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| PIMCO's real tweet from today. |
News (Wed evening) – BTH
Markets Live – alphaville / FT
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
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| Stocks are cheap, but for a good reason |
EURO CRISIS
Doubts Arise in Euro's Birthplace – WSJ
Netherlands' support weakens amid concern over bailouts.
A UK treasury spokesman told newswires (20-Dec) that exposure to the eurozone is the main reason why Moody's earlier the same day warned that Britain's top-level grade faces "formidable and rising challenges."
Credit: The European Flutter – Macronomics
very nice credit market report from 20-Dec
LTRO AFTERMATH
Chart Of European Emergency Liquidity Back At Record Levels – ZH
BofA: We also note that only 523 banks used the ECB’s first 3y tender, compared to 1121 banks in 20091. As we highlighted in our preview, this is overall indicative of banks’ reluctance or inability to engage in carry trades to the same extent as 2009. BAC: The tender results do not however change either our longer term cautious outlook on growth, or the periphery.
The ECB, eternal and infinite – Free exchange / The Economist
At some point won’t the leaders realise that lacking all private-sector confidence, their banks can no longer finance a growing economy? At that point, they will conclude the euro is not sustainable and prepare to exit, and the ECB’s limits will have been reached.
On Liquidity: Watch What the ECB Does, Not What It Says – Credit Writedowns
It says it will not backstop sovereigns, yet since it has renewed its bond purchases in August, its bond purchases have almost matched the new bond issuance of Italy and Spain.
The Eurozone Is Saved? – Lance Roberts / dshort.com
So, while these operations once again postpone the inevitable, they do not fix the economic problems of the debt laden countries. There has been no resolution that gets these economies growing again, reduces their debt-to-GDP ratios or increases their economic prosperity.
The ECB Long-Term Repo Operation is about price not quantity – Credit Writedowns
In other words, the LTRO is an ECB tool that assists in setting the term structure of euro interest rates. It helps the ECB set the term cost of funds for its banking system, with that cost being passed through to the economy on a risk adjusted basis, with the banking system continuing to price risk.
Good that banks finally found some money, but bad that they have had to look underneath sofa cushions.
Don’t stay in School (too long) – The Trader
Excerpt and link to Ice Cap’s Dec report – very funny, sad and true – but not very useful.
More on LTRO (copypasted from Abnormal Returns)
OTHER
Economists explain 2011 in 18 charts – Wonkblog / WP
with some charts from SocGen.
Emerging Markets Briefer – Danske Bank (pdf)
Goodbye to a year we all want to forget.