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Wednesday, February 29

29th Feb - After LTRO comes the pain

Source: Finviz. Join it, it is good.
If you are after the LTRO updates after today's main event, check my continuously updated LTRO: The Ultimate Collection and scroll way down to the bottom. What did I tell you? I told you that LTRO is what you want it to be and warned about the EURUSD. It's happening already. Oh, almost forgot, the calendar is updated.

29th Feb - TROLOLO Countdown

Just a short morning post, for more see last evening's LTRO is what you want it to be. Today the LTRO auction, followed by revision to USD 4Q GDP and Bernanke addressing the Congress. For my full LTRO coverage, see this LTRO: The Ultimate Collection

Tuesday, February 28

28th Feb - LTRO is what you want it to be

LTRO is the main event, but at this point it is even more over-hyped than last summer’s great EU Summit. I do not want to give the impression that the TROLOLO is not important - it serves a good, valid purpose (save the banks via stealth-taxing the general population), but there is more to it. For every personality type, the LTRO is a proof that they are right.
  • Crazies: the governments are inflating their and banks' problems away.  Buy gold and ammo!
  • Permabulls: risk-on is the only game in town
  • Idiots: Eurodream is alive and our leaders are working to find the solutions
  • Left-wingers: the good government is saving the evil banks
  • Right-wingers: the evil government is strangling the good banks
  • Electorate sheep: I don't understand what is happening, so I don't care.

In reality, LTRO is just a side-show. It is not a solution and certainly not a lasting solution to anything. It just allows the crisis to go on for a bit longer, until a wall is hit or a true solution is found. Full union or break-up. Given these end-game choices, the larger the LTRO, the larger the eventual chance for a full union, as everyone's fates are tied closer together. A full union would be just a tiny, additional step at that point.

28th Feb - Foreign language lesson

Finnish lesson! Lotraus (to lotr): to play or splash around with a liquid. Also slang for heavy drinking of alcoholic beverages. 

A recap post coming up around US close, but just a short update for now:

28th Feb - Que Sera, Sera...

BofA:s Greek tree from ZeroHedge

I had a larger post last night LTRO, Oil and Magic with tons of good reads and pretty pictures. Please consider this post as a morning brief and update. The LTRO: The Ultimate Collection and the Calendar have been updated. I am on Twitter, Facebook, email and

Monday, February 27

27th Feb - LTRO, Oil and Magic

It's been a long day, and a lot of material to cover. I am terribly thankful that Financial Times blog alphaville has linked to my LTRO-post. I wish at least some of the newcomers will stay awhile.

Markets have been buying into the LTRO like there's no tomorrow, while blogosphere and bank research has been medium-term negative in its comments - especially as oil prices have rallied in tandem. Is this a proper risk-on, as the last time I remember similar market cointegration was in 2008? A case of buy the rumor, sell the news? The three charts beside Euro Crisis: General tell the whole story - debt outside the eurocore unsustainable, credit crunch and slow-motion deposit-run from the periphery to the core. The game is still very much on.

27th Feb - Heavy on the Brain

Source: onefte
Good morning, I will update the Calendar page next. If you are just returning from the w/e, here’s what you have missed:

Greece, LTRO and INFLAYCION normal weekend linkfest
Weekly Support week in review, next on previewed

The Sunday's LTRO post is my all-time most read post - maybe I did something right for once. Now to this morning's links!

Sunday, February 26

LTRO: The Ultimate Collection

This post will be updated (last 10-May 2012 GMT

This is arguably the largest or at least the most hand-picked post on the ECB’s LTRO on the web. Most of it is content that I have posted previously. First some random quotes and quick reads, followed by a huge timeline of blog articles, bank research etc. 

One of the best non-technical introductions is What is LTRO? by Macro and Cheese. LTRO is comparable to quantitative easing in US as it has resulted in a liquidity-driven asset price rally.

You can follow me on Twitter or Facebook and email me for suggestions and requests. I also have an automated publication based on the twitter feeds I follow at

Then to the readings:

Saturday, February 25

25th Feb - Weekender: Greece, LTRO and INFLAYCION

Here is the weekend's huge linkfest. In the first section GENERAL some articles arguing how the official mantra of austerity and balanced budgets in Europe is utterly wrong policy. In ECB & LTRO the next week's main event is discussed. GREECE discusses the current state of the story, but we know the ending already.  

FED asks when they will raise the interest rates in US, and is there any more QE coming looks at the inflation picture in US and debates when the monetary policy will tighten again. OIL is related to the Fed, as the economies cannot sustain much higher prices, but unfortunately the easy monetary policy, competitive devaluations and epic policy fail in Middle East have pushed the price high. Since when have stocks, gold and oil rallied together? Answer in the attached video...

25th Feb - Credit Guest: Schedule Chicken

This week's credit guest post by Martin from Macronomics takes a look at what is happening to European sovereigns (PIIGS spreads against the core narrowing, as banks load up on LTRO-eligibile collateral) and the key dates ahead for the Greek bailout package - any of these could derail the circus. A Weekender-post and a LTRO-special coming up next, but for now, enjoy Martin's analysis:

Markets update - Credit - Schedule Chicken

"Every man prefers belief to the exercise of judgment."
Lucius Annaeus Seneca

Friday, February 24

25th Feb - Weekly Support

Here are the links to weekly summaries and previews of the next week. This post will be updated as new material comes in! There was so much material last week on multiple important topics and I have been busy. Therefore, the Best of The Week takes a break until next Friday. A Weekender and a LTRO II Special will be out on Saturday. 

MoreLiver is on Twitter, Facebook and email. I also have an automated publication based on the twitter feeds I follow at

24th Feb - Press Digest

Here are the ending week’s select articles on (mostly) the euro crisis from the ‘big three’.

Der Spiegel publishes very "German" articles - to the point and stylish, while The Telegraph is louder. The Economist feels like it is made by people with very fancy educations, but most often lacking in detail and depth - but they have a good nose on what is important, and for the past 20 years their track record is unparalleled - their views turn out to be mostly correct. Warning: reading newspapers and magazines is usually not a good way to get ideas. The whole point of reading these is to know and understand what the other people are thinking.

24th Feb - More lipstick needed

Nice long piece from PIIE and more bad news from Portugal. ECB's Mario interviewed not once, but twice! 

Hommasta tulijat: tervetuloa ja toivottavasti tykkäätte!

Thursday, February 23

23rd Feb - Olli's Charts

SocGen: earnings expectations just like in...
LTRO getting closer - while the Greek details are still undone. What happens after the demand for bonds eligible for LTRO collateral runs out? Where will the demand to replace the one-off LTRO come? The only possibility is either coercion or a threat of new LTRO's in the not-too distant future. A special post on the acronym beast coming up this weekend. You can follow me on Twitter or Facebook and email me for suggestions and requests. I also have an automated publication based on the twitter feeds I follow at

23rd Feb - Slowing down

After buy the rumor, time to sell the news? Around 1.35?
Morning briefs and some nice articles to kick off the Thursday. Seems a lot of things are slowing down - European yields are not decreasing (ahead of LTRO, after the Greek bailout), stocks are not much higher, BoP-differences are smaller, € is not rallying. Are the "good news" already in prices?

Troolista tulijat: tervetuloa ja toivottavasti tykkäätte!

For a lot more, see last night's Greece, LTRO, Assets-post that grew larger than budget deficits. For more Greek bailout stuff, see Eurogroup Special II and Eurogroup Special.

Joke of the Day:  "If they could export the Nordic primary school system to China it would help to slow them down" Kari The Street

Wednesday, February 22

22nd Feb - Greece, LTRO, Assets

There will be collateral, but of the wrong kind
Huge post, but with the Greek "bailout" and coming default, LTRO just around the corner and bullrun in oil and stocks, there is plenty of material to go through. No-one seems to think Greece has any chance to pull through. More comments flying around that there is too much expectations loaded on LTRO. At the same time ECB is becoming reluctant to do more SMP - and so are the markets, as they were subordinated by the ECB in Greek debt. In case of further escalation of the crisis, what else is there left than a 25-bp rate cut, some minor SMP and all wishes on the rescue vehicles that have no paid-in capital? 

22nd Feb - Eurogroup Special II

Here is finally last night's collection on Greek bailout 2, delayed because of my fried computer. The commentary is stunningly negative. For earlier reactions, please see Eurogroup Special from 21-Feb.

Quote of The Day: Rule number one of staying up all night and doing things you regret, is to lie in bed the whole next day and ignore your phone and hope people forget what you did. Rule number 2 is not to go on TV and admit to the obvious mistakes less than 12 hours later – Peter Tchir

Tuesday, February 21


My home pc's power supply just retired. Blog is on holiday for now until further notice. Stay safe and beware of Greeks carrying gifts.

21st Feb - Too much Risk-On?

See my previous (updated 21-Feb 12:30 GMT) Eurogroup Special for the Greek bailout analysis. Greece’s ministry of finance has announced that they will enforce losses on bondholders who do not participate in the voluntary bond swap. I don’t think ISDA could still consider this as a voluntary event, and credit default swaps will be triggered.

21st Feb - Eurogroup Special

First the "facts" on the second Greek bailout, followed by analysis and comments. This post last updated 21-Feb 12:30 GMT. Updates at the bottom of the post. Also see Eurogroup Special II

Monday, February 20

20th Feb - Eurogroup sits...and sits

To honor the US market holiday, in addition to the usual euro crisis- and market-related links, plenty of off-topics as well: 

Eurogroup press conference Scheduled to start at 23:00 CET

Sunday, February 19

20th Feb - Pari Passu, Yeah, Right...

Good morning, several links on Volcker rule and ECB bond swap below. Consensus seems to be that ECB has effectively subordinated other debt holders and this will set an important and unfortunate predecessor for future haircuts. Eurogroup decides on the second Greek bailout package starting from 14:00 GMT, and there are reports that Greek debt sustainability will not be reached with the current measures - though this surprised hardly anyone.

Saturday, February 18

18th Feb - Credit Guest: The European Opprobrium

Credit markets guest post by Macronomics

18th Feb - Back to School

Back to School is back! First some announcements, collections, free courses and regular publications, followed by selected research papers. (previous Back to School.)

Previously on MoreLiver's weekend:
Sat - Weekender: ECB bond swap special
Fri - Weekly Support
Fri - Press Digest
Fri - Best of The Week

WolframAlpha Pro launches in an effort to democratize data scienceFlowingData
Taking the next step in the Wolfram|Alpha experiment, Wolfram launches a Pro version that lets you plug in your own data and get information out of it.

Datastream Professional launchedThomson Reuters
Integrates economic research and strategy with cross asset analysis

18th Feb - Weekender: ECB bond swap special

The week's main event was the never-ending Greek crisis. Eurogroup will supposedly agree on Monday to go ahead with the second bailout package and ECB has announced a bond swap of its Greek holdings. I've included all even remotely relevant articles on that topic, as ECB's bond purchases and its existing holdings, functioning of rescue vehicles and the reactions of the credit rating agencies and possible fallout from CDS-triggering will set an important precedent to Portugal's (and possibly other countries) coming haircuts. Probably early next week there will be more coherent writings on these topics.

Friday, February 17

17th Feb - Weekly Support

Here are the links to weekly summaries and previews of the next week. This post will be updated as new material comes in! A Weekender post will be out on Saturday. Next week will be dominated by Monday's Eurogroup meeting supposedly signing the second Greek bailout and on Wednesday Feb PMI's from Europe. US has a market holiday on Monday.

You can follow me on Twitter or Facebook and email me for suggestions and requests. I also have an automated publication based on the twitter feeds I follow at

17th Feb - Press Digest

Here are the ending week’s select articles on (mostly) the euro crisis from the ‘big three’ Der Spiegel, The Telegraph and The Economist.

Debt crisis: As it happened
Fri Feb 17 (online later)
Thu Feb 16
Wed Feb 15 
Tue Feb 14
Mon Feb 13

17th Feb - Best of The Week

Here are the ending week's best reads collected to one post, in case you missed some of them. Greek Exit Collection from last Sunday is also topical. I'm on Twitter, Facebook, and 

17th Feb - Merkozy, Greece and old people

A reminder to see my  Greek Exit Collection from last Sunday. A Best of The Week coming up shortly, the usual weekender posts tomorrow. For the daily briefs, see my earlier post.

How 3 Myths Drive Europe’s Response to Debt CrisisView / BB
Harald Uhlig: 1) Italy’s interest burden unmanageable 2) austerity is disaster, growth requires spending 3) ECB avoided Europe’s disaster with LTRO
Pardon The Interruption, "Debt Crisis To Resume Shortly" ZH

17th Feb - Morning Briefs

I'll post a readfest and a best of the week later today. Usual weekend posts on Saturday.

News roundup (Fri morning) – Between The Hedges
Markets roundup (Thu evening) – Between The Hedges
Recap (Thu) – Global Macro Trading
EZ crisis press summary (Thu) – openeurope
Emerging London Headlines – beyondbrics / FT

  -renewed optimism on Greece, Norges Bank concerned about NOK’s strength
Morning Briefing – BNY Mellon
  -key lesson: while high debt levels are bad, maximum austerity is not a solution
Market Preview – Saxo
  -Eurogroup meeting on Monday
Press digests by Reuters: FT, WSJ, NYT

Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
Tracking Europe’s Debt Crisis – NYT

Thursday, February 16

16th Feb - Medic!

Due to an emergency, I cannot post this evening.

16th Feb - Kicking Kicking The Can

 Fading optimism, just like twice last year
As the Greek situation remains fluid (I am at loss of words to describe what it is anymore), France and Spain boldly try to sell bonds for 14.3 billion. Market appetite is definitely there, given the upcoming LTRO. On Friday Merkel travels to Italy to meet Mr. Monti, and they will hold a press conference after the meeting.

Wednesday, February 15

15th Feb - Another EZ Kung Fu-Move

This is getting even crazier than I thought. After the Chinese rumor, which has been taken from the carbonite every six weeks to prop up the morale of the troops, it is now back to the beatings until the morale in Greece really improves. Now the creditor countries are planning to hold on to the bailout money until the Greek elections, to make sure that there are no instant austerity reversals in Athens after a couple of months' time. 

15th Feb - Too Quiet

Quiet article morning, only few articles and the usual daily links below. For the good reads, please see my last night’s Greesus… post. EDIT: The supposedly big news is China's pledge of support to Europe - these are just empty words, it is important to look at what they do, not what they say. China has previously said many times that they will not support Europe, and have said it in the nastiest ways Chinese face-saving courtesy allows.

Tuesday, February 14

14th Feb - Greesus...

Wednesday’s Eurogroup meeting cancelled. They will never get the Greek package through. Is the Big D around the corner? My crisis rules from 24-Jan, or how to know when it is time.

14th Feb - Moody's downgrades the Europe

Red, black and rising.
The Moody's downgrades do not bring much price innovations to the table, as markets had already discounted the news. Biggest "surprise" was UK's negative outlook, as the country has tried to distance itself from the Eurozone's troubles. Even a sovereign currency does not guarantee growth & solvency. 

The EU's economic imbalance report published later today will probably not contain any surprises, and I believe the main function is to show to markets how much the authorities understand and realize. After writing the above, I immediately had doubts and fear the report might be a negative surprise. What if it continues to insist this is a debt problem - instead of being a currency crisis, followed by a balance-of-payments-crisis, private debt crisis and public debt crisis. 

Monday, February 13

13th Feb - Merkelian Menopause

After Greece is "solved", talk is now back to LTRO and the other usual suspects. The Greek tragedy is not over, it is only having a Merkelian menopause - and the next surprise opportunity will be Wednesday's Eurogroup meeting. There will be plenty more of scares on this ride.

13th Feb - Greece voted, will get busted

The Greek parliament voted and accepted further austerity measures to secure the next bailout payment, thus avoiding an outright default ahead of the 20-Mar bond payment. Consensus says Greece is unable to meet the demands set, but for the moment they are “okay to go” with promises. But as long as Sarkozy gets re-elected, nothing else matters…

Nordea Bank’s large shareholder and Chairman of the Board Mr. Wahlroos stated that the problem is Merkel, who instead of recapping the bankrupt German banks in 2010 with 30 billion, lobbied hard for other European leaders to bail out Greece – resulting in total costs of hundreds of billions. English Google Translation here.

Sunday, February 12

12th Feb - Greek Exit Collection

Here is a collection of previous articles, views and analysis on what happens if Greece leaves the euro. Also a section on Euro break-up at the end of the post.

Saturday, February 11

11th Feb - Weekender (Diversion)

Here are the weekend's off-topic reads.

FBI File on Steve Jobs Probed Apple Founder’s Drug Use, Character TIME
The FBI’s 191-page file on the late Steve Jobs — released Thursday — reveals that the feds were keenly interested in the Apple founder’s character, as well as his past drug use and criminal history. The FBI opened an investigation of Jobs in 1991, because he was under consideration for a presidential appointment to the President’s Export Council under George H. W. Bush.

11th Feb - Weekender

Weekend's market-related reads from the web. 

Earlier on MoreLiver's:
Weekly Support weekly summaries and previews
Press Digest select articles from The Economist, The Telegraph, Der Spiegel
Best of The Week  the best links from my ending week's posts

A few thoughts about the Euro snafu…Macro Rants
If Germany wants to remain an export powerhouse, it must find paying customers — which excludes much of the current EU membership.    Germany would have to restructure its economy too (away from exports) to make the Euro work. Looking only at financial costs, it’s a no-brainer for Germany to shrink the Euro membership or to revert to a (new) D-mark.

11th Feb - Weekly Support

Here are the links to weekly summaries and previews of the next week. This post will be updated as new material comes in!
What you might have missed from Friday:
Press Digest, roundup from The Telegraph, The Economist and Der Spiegel
Best of The Week best ones collected to one post

Friday, February 10

10th Feb - Press Digest

Here are the ending week’s select articles on (mostly) the euro crisis from the ‘big three’ Der Spiegel, The Telegraph and The Economist.

Railing against the 'Fourth Reich': Anti-German Mood Heats Up in GreeceSpiegel

10th Feb - Best of The Week

Here are the ending week's best reads collected to one post, in case you missed some of them. Coming up next: Press Digest and tomorrow the Weekly Support and Weekender. I'm on Twitter, Facebook, and 
How Euro Brinkmanship Is Beginning To Succeed PIIE

10th Feb - No news is the new good news

Short post for the morning, see last night’s A Greek Deal? For now? for more.

Thursday, February 9

9th Feb - A Greek Deal? For now?

BoE announced slightly more QE than expected, ECB did nothing but talked a bit about the coming LTRO and supposedly there is a deal now on Greece’s next bailout package. Of course, the stuff that the Greeks have pledged to do will not and cannot happen. What next, more bailout packages? Greece is the European version of the American debt ceiling fiasco. If the Americans are good at having bipartisan politics, we will soon have bipartisan Europe – but where will the rift appear, between the north and south, or Germany vs everyone else, or France & Germany vs. UK?

A convicted fraudster once told me, modifying the old Finnish saying "what you learn when young, you can when old":  

9th Feb - Morning briefs

Just a short morning post, I’ll update this as the stuff comes online. See last night’s ECB, Bottoms Up! post for the good reads and my views. Still no Greek deal... Would be funny if it weren't sad. Today's main event will be ECB's Q&A session with the press, where Super Mario will surely be questioned on the Greek PSI and ECB's participation policy.

Wednesday, February 8

8th Feb - ECB, Bottoms Up!

I found some thoughts on the still unconfirmed and detail-poor plan from the ECB to "participate" in restructuring of the Greek debt. Here I summarize what I've seen and what I think:

It is up to the markets to decide how good or bad it is that the ECB lowers itself from superseniority to just "occasionally somewhat more senior than others". The markets could see this as a positive, as less seniority among debt holders will make other haircuts less painful to private investors. Under the ECB's superseniority, any bond purchases (=SMP) would actually weaken private holders' future position in possible restructurings, and thus render the SMP useless - or even harmful. 

8th Feb - Morning briefs

This is just a quick morning update - main news ECB's participation in bond swap that basically means EFSF recaps the ECB. Politically much easier, I wrote about this (incoherently) earlierFor more, please see last night’s huge post.

Tuesday, February 7

7th Feb - ECB agrees to swap

ECB sending Greek bonds to EFSF is basically a very important piece on both ECB policy, on rescue vehicles’ future use and obviously for Greece, as the ECB participation in the bond swap increases the effective haircut level. Very, very interesting. Thank you for offering all our future tax revenues to saving French and German banks. Bonus question: guess why I thanked the flower pot for 6-Feb-2012?

7th Feb - Greek lunch

Just a mid-day roundup on what the blogs are saying on Greece. Unibet offers a bet that Greece is not euro currency user by the end of the 2012, multiplier 2.65. Not a bad bet. EDIT: articles added.

7th Feb - (Almost) Empty Post

Very short post after previous days' exhaustive link fests. See last night’s Pulling The Greek Tooth for more.

7th Feb - Guest: Credit Markets (PIIGS)

Guest post by Macronomics:

Markets update - Credit - Lather, rinse, repeat

Greek Calends - "To defer anything to the Greek Calends is to defer it sine die. There were no calends in the Greek months. The Romans used to pay rents, taxes, bills, etc., on the calends, and to defer paying them to the “Greek Calends” was virtually to repudiate them. (See NEVER.)" - E. Cobham Brewer 1810–1897. Dictionary of Phrase and Fable. 1898.

Monday, February 6

6th Feb - Pulling The Greek Tooth

The consensus from investment bank research seems to be that an involuntary restructuring – a “hard default” would be bad, increase systemic risk, spread the contagion and push ECB to massive monetary easing, which would weaken the euro. Old players who are blogging seem to think that it would be better just to get the event over and done with and deal with the fallout. I think it would be better to listen to experience in this case. True, the world is a different animal from 20 years ago, and the banks are more opaque, more levered and the interconnectedness of everyone is scary. Everybody remembers Lehman.

6th Feb - Déjà vu all over again

Superbowl, never-ending Greek negotiations, pointless presidential elections in Finland, Russian gas, China & Russia lining up against the Western world, risk-on when everything is wrong. Like Yogi Berra would say, it’s déjà vu all over again. Today mostly Greece and a large set of generics:

Sunday, February 5

5th Feb - Podcast roundup

Me walking to the supermarket yesterday
Some recent podcasts from around the world. Perhaps a new regular post?

The State of the World Economy in 2012LSE, mp3
Two economic experts discuss the state of the world economy after the eurozone financial crisis. Jean Michel Severino is inspector general at the French Ministry of Finance. Martin Wolf is a journalist at the Financial Times.

Willpower: Self-Control, Decision Fatigue, and Energy Depletion LSE, mp3

Saturday, February 4

4th Feb - Weekender: Holes in The Firewall

Interesting week - ESM, fiscal treaty, LTRO and the coming Greek solution, whatever it will be, have stabilized the euro crisis for a moment. The firewall seems to leave Portugal outside its protection, even though it should be protected by these measures. 

The ECB's policy not to participate in Greek haircut, and the ESM text that private sector participation i.e. haircuts in the future are not ruled out, have left a gap in the firewall, either intentionally or accidentally. Markets guessed this even before the ESM treaty was public and that's why Portugal's yields have surged.

4th Feb - Press Digest

Here are the ending week’s articles on euro crisis from mainly the ‘big three’ Der Spiegel, The Telegraph and The Economist. A Weekender-post is coming up next and you might want to check:

Weekly Support weekly summaries and previews 
Best of The Week the best links from my ending week's posts
Back to School roundup of research papers for thus inclined.

Merkel Gets Her Fiscal Pact: EU Summit Marred by Fears of German Domination Spiegel

4th Feb - Weekly Support

Here are the links to weekly summaries and previews of the next week. For Friday’s US Employment articles, see the bottom of this post. A weekly press digest and a Weekender post coming up on Saturday. Facebook post updated. This post will be updated later.

You can follow me on Twitter or Facebook and email me for suggestions and requests. I also have an automated publication based on the twitter feeds I follow at

To the links:

Friday, February 3

3rd Feb - Best of The Week

Here are the ending week's best reads collected to one post, in case you missed some of them. 

Europe Needs a Real Fiscal UnionTim Duy’s Fed Watch

3rd Feb - Back to School

Back to School is back after a long break. For the bedroom quants, Bloomberg's decision to put out the API for free is probably good news. Give or take couple of months, perhaps there will be interesting stuff on sourceforge and the like.

Open Market Data InitiativeBloomberg
BB opens up it’s BLPAPI to anyone without cost or restrictions – data sold separately. Very nice for developers.

People of Quant ResearchQuantivity
Old post: quants by topics, home pages and publications

3rd Feb - Speed Limits of Money

Morgan Stanley's chart on ZH
Even though ECB has been very expansive and its balance sheet is now relatively larger than  "helicopter/printing" FED's, the velocity of money is not picking up. If only the French would have recapped their banks in 2008, instead of pretending that everything is fine, maybe things would have been different during this storm.

Thursday, February 2

2nd Feb - Guest: Money for Nothing

A guest post by Martin from Macronomics. Enjoy!

Markets update - Credit - Money for Nothing 
"Now, what I want is, Facts. Teach these boys and girls nothing but Facts. Facts alone are wanted in life. Plant nothing else, and root out everything else. You can only form the minds of reasoning animals upon Facts: nothing else will ever be of any service to them. This is the principle on which I bring up my own children, and this is the principle on which I bring up these children. Stick to Facts, sir!"
Charles Dickens - Hard Times - 1854

What a month in credit! The significant tightening move we have seen in credit as well as the rise in risky assets can certainly be attributed to the LTRO factor as well as the FED stepping with the FOMC decision of maintaining rates low for an extended period of time. Given markets are addicted to liquidity, the rally has been significant and could be even more significant as we await the next round of LTRO funding by the ECB.

2nd Feb - Can we start talking about a 'Mario Put'?

The more interesting and unique links are highlighted below. Probably nothing much will happen in the markets until the next major EU summits and any signals of the next LTRO. It is definitely being priced in now, and you might read this post for more. I would go as far as calling the LTRO the "Mario put", to paraphrase the classic "Greenspan put" to modern times. I just updated the Facebook post and will now think some derivative thoughts for future posts. No-one has original ones in practice. If you have any ideas, contact me.

To the links: 

Facebook: rolling linkfest

Here is a collection of recent articles and blog posts on Facebook’s IPO. This post will be updated later and new additions will appear at the bottom of this post. Enjoy, have fun. If you feel this blog is high-quality work, spread the word. You can follow me on Twitter or Facebook and email me for suggestions and requests.

MoreLiver’s view: Company whose products everyone uses already - no user growth in future. Earnings 1bn, and 12% of that comes from Zynga games. Market cap of 100bn would give a P/E ratio of 100. The real question: is Facebook a growth company, or WAS it a growth company? The float is around 5bn, and there are a lot of potential sellers. What's the holdout lock-up period for old owners, 6 months? Of course, it is a buy – everyone will want theirs.

To the links:

2nd Feb - FB FB FB. DB says BoP crisis

Very bad morning for quality articles: Facebook probably stole the day for all the journalists and half the bloggers in the world. Nice piece from Deutsche Bank, though. At least they understand that the currency union was and is, well, a political idea that does is not working in reality.

I'm seriously thinking of writing a Facebook post, but try to fight the urge. Company whose products everyone uses already - no user growth in future. Earnings 1bn, and 12% of that comes from Zynga games. Market cap of 100bn would give a P/E ratio of 100. The real question: is Facebook a growth company, or WAS it a growth company? The float is around 5bn, and there are a lot of potential sellers. What's the holdout period for old owners, 6 months? Of course, it is a buy. Everyone will want theirs.

1st Feb - Facebook files

All Stratfor content is free for now. After they got cyberbombed, they are trying to build some trust. Show them some respect by reading their stuff for free. I originally thought I am not going to follow Facebook at all, but you know how it is with Facecrack – “one more refresh”. In normal links: something strange was going on with Italy - Morgan Stanley has figured a way to get sovereign state to actually pay up, apparently. As this is what everyone else wants, this could attract some attention and action. The rest is pretty standard stuff, though the breakup guide from alphaville was pretty cool.

To the links:

Wednesday, February 1

1st Feb - Why not to call default a default?

Why not to call default a default

Leaders are afraid of the voters, not the market 

Why are the eurocrats so scared of calling the Greek default a default? There are some economic reasons for that, but mostly it is political. An involuntary event would trigger CDS contracts and make it official that an Euro member has defaulted. Many current systems from Basel Accord to central bank collateral policies would look idiotic. 

ECB as a sovereign backstop (i.e. accepting basically any useless promissory notes as valid collateral) would become politically more difficult to maintain. Voters who do not understand any of this, but still calling all the shots, could turn against their leaders and vote for parties promising more jobs, regulation and bank taxes and less China, EU and credit default swaps.

Countries with an unsustainable debt situation, notably Portugal and Spain, could start thinking that if the Greeks are allowed to do it, why not us as well? The official EU line and thinking is that the calling the Greek default a default and not something else would make markets nervous and spread the disease. The markets are already nervous - the default would not change anything on that front. It is the sovereign governments and their voters that the eurocrats are afraid of.

1st Feb - Clueless in Brussels

My thoughts coming up in today's later post. Meanwhile, enjoy the following daily briefings and articles: