Seems like not everyone is terribly interested in the proposed treaty changes, as bloggers already realized.News (Fri morning) – BTH
News – The Trader
Morning Briefing – BNY Mellon
Daily – Danske (pdf)
Market Preview – Saxo
EURO CRISIS
Eurogeddon – fear not, it's under control – The Telegraph
According to Mario Draghi, president of the European Central Bank, we can all stop worrying about the potentially catastrophic consequences of a euro break-up because it's not going to happen. So confident is he of this outcome that it would be "imprudent" to make contingency plans for anything else.
Growth More Than Debt Key to Understanding Euromess – Ezra Klein / BB View
In other words, if the prospects for growth were good, the institutional changes would be an easy sell, and the debt problems would mostly take care of themselves. However, if the growth isn’t there, then ultimately, the institutional reforms won’t be sustainable, because the nations on the periphery won’t be able to reduce debt burdens without destroying their economies.
SUMMIT WATCH
Quotes du jour – Eurofudge edition – alphaville / FT
Remarks from market participants on the EU negotiations.
Is this enough to save the eurozone? – alphaville / FT
Statement, with key sections on the EFSF, IMF, ESM and PSI. FT: To this observer, although the ECJ will be given new powers, it seems that without a new treaty we’re left with little more than another Stability and Growth Pact.
Cameron Finally Tells Sarkozy Where to Go; New treaty Splits European Union; Extreme Legal Complications Already; Expect Discord to Rapidly Spread – Mish’s
Meanwhile, the discord between Cameron and Sarkozy is going to quickly spread elsewhere. The more details this new treaty adds, the more discord there will be. The entire package will blow up in May (if not long before that) if any country or the German supreme court insists on a voter referendum.
Finland, Netherlands, Ireland Threaten to Torpedo Merkozy Plan; Finnish Parliament Rules Proposed Treaty changes "Unconstitutional" – Mish’s
This is exactly what one should expect to happen when two arrogant fools (Merkel and Sarkozy), think they can sit in a corner and decide the fate of 27 nations or even 17 of them.
New Euro Accord Consists of 23 Countries; UK, Hungary to Exit New Treaty; Expect More Exits; Treaty Signers Need to Collectively Pony Up $268 billion to IMF – Mish’s
The losers who stay in the proposed Merkozy treaty get the pleasure of forking over a collective $268 billion to the IMF. Expect the number who stay in to shrink. Then in May, unless the proposed treaty is further watered down, expect some of the 17 EMU (Eurozone) members to refuse to ratify the treaty.
Euro summit rocked by row over veto plan – The Telegraph
A rebellion by Finland, the Netherlands and Ireland is threatening to torpedo the Brussels summit plans – despite repeated warnings that today is the last chance to save the euro.
The package that is on the table in Brussels will not solve the crisis, but that is for reasons that have nothing to do with David Cameron’s negotiating position. The problem is that it is not the “fiscal union” that is being spoken of – merely a new version of the old budgetary rules. And it also seems increasingly unlikely that the Brussels package will be used as a smokescreen or trigger to do what the markets really want – which is for the ECB to commit to huge purchases of Italian and Spanish bonds.
All night EU summit sees new promises, new tensions – Saxo Bank
IMF again (not enough for anything), ESM moved from 2013 to 2012, no answers on where the money will come. Meanwhile, Cameron’s middle finger and bank downgrades from Moody’s
EU summit: no words on economic growth? – Saxo Bank
Nothing on economic growth; agreement opens a backdoor for more monetization
EU Council statement – no bazooka – Pragmatic Capitalism
Translation: We still don’t understand that the markets aren’t going to wait until next summer for this crisis to pass, but this sounds better than admitting that we just spent all week eating moules-frites.
Cameron: We had to pursue very doggedly what is in Britain's national interest. I wish colleagues well in the euro. While there were strong disagreements, it was good natured. What was on offer wasn't good enough for Britain.
”BANKING”
*Shadow banking and the seven collateral miners – alphaville / FT
One of the most overlooked and least understood bank funding sources in the financial system…how asset managers have come to replace traditional creditors — primarily households — as the key financiers to the banking system.
One of the most overlooked and least understood bank funding sources in the financial system…how asset managers have come to replace traditional creditors — primarily households — as the key financiers to the banking system.
Want to boost tier one capital? Make losses and prosper – alphaville / FT
Turning losses to deferred tax assets to increase capital ratios…
Moody's Downgrades French Banks Again Citing Significant Deterioration in Liquidity and Funding Conditions; EU Banks Must Raise $153 Billion of Extra Capital; Banks Running to Stand Still – Mish’s
Given that things are nearly always serious, the safe thing to do is not believe anything, especially in regards to solvency issues, capitalization needs, and liquidity problem denials. I have a big hint for all these eurocratic and central bank liars: If you want to restore confidence, the first thing you have to do is tell the truth.
and from shadow banking to a recent case study:
MF GLOBAL
Don’t Ask Jon Corzine To Remember Petty Details Like Where He Put All His Customers’ Money – Dealbreaker
The fruitless inquisition of Jon Corzine – Wonkblog / WP
On Corzine - MFG in the fog of war – Bruce Krasting
Corzine Defends His Actions at MF Global – DealBook / NYT
Corzine Testifies He Didn’t Intend to Break Rules – BB
Corzine Defends Tenure, Puzzles Over Missing Funds – WSJ
Corzine’s Know-Nothing MF Global Defense – naked capitalism