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Monday, February 13

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.


If you are just back after the weekend, here’s what you have missed:

Greek Exit Collection collection of the best writings on Greece and euro break-up
Weekender (Diversion) off-topic readings
Weekender markets-related readings
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 last week's posts

You can follow me on Twitter or Facebook and email me for suggestions and requests. I also have an automated publication based on feeds I follow at paper.li, now to today's links:

News – BTH
News – The Trader
Emerging London Headlines – beyondbrics / FT
  -Greece approves austerity package ahead of Eurogroup on Wed
Morning BriefingBNY Mellon
  -Greek vote Q&A – here’s why it matters
Market Preview – Saxo
Press digests by Reuters: FT, WSJ, NYT

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

EURO CRISIS: GENERAL
Europe: "The Flaw"ZH
Credit Suisse: Debt is no cure for debt. What it can do is prevent a self-fuelling Fisher-style debt-deflation and it is clear that the LTRO has at least to some extent achieved that. And it can buy time such that, if the basic business model is restored, solvency can be earned. But we are not sure the business model has been restored; far from it.

Europe’s black cygnets Macrobusiness
Coming elections and a very good overview of the sorry state of Spanish economy

EURO CRISIS: GREECE
Schrodinger’s Cat in Athens Credit Writedowns
Greece is not going to make good on its financial obligations, but it still may not default… It is sovereign, but it isn’t…It is not clear that Greece could “re-drachmatize” the economy even if it wanted to.

Papademos says earth is flat TF Market Advisors
I remain curious why he is allowed to say that default is chaos without a shred of evidence, and countless examples to the contrary.  His job, the reason the EU instated him as puppet was to do their bidding, yet every statement he utters in an effort to get that accomplished is treated as “gospel” truth.

Marshall Auerback: Greece – A Default is Better Than the Deal on Offernaked capitalism
I remain curious why he is allowed to say that default is chaos without a shred of evidence, and countless examples to the contrary.  His job, the reason the EU instated him as puppet was to do their bidding, yet every statement he utters in an effort to get that accomplished is treated as “gospel” truth.

Greece at the Point of no ReturnTestosterone Pit
Their impossible-to-fulfill conditions give them plausible deniability. They can say “afterwards” that they tried everything, but that Greece simply couldn’t follow through.

One Greek hurdle down, but more ahead FT / alphaville
Antonis Samaras, leader of New Democracy and likely the next prime minister, said the measures should be renegotiated after national elections expected in April. …

Total Chaos; Riots Rage; Athens Resembles War Zone Mish’s
The Irony of the day can be found in The Telegraph headline Merkel has herself to blame if Greece defaults. Blame? Merkel will be praised in Germany when Greece exits the Eurozone.

Will the Greek Bailout Rid Europe of Danger? Pension Pulse
The Germans got their way but they are dreaming if they think this is the end. My money is on Soros -- it always has been -- and he will be proven right for taking Germany to task. I'll be blunt, if Germany doesn't get its act in gear and back up a eurobond market, eurozone is finished.

Steen Jakobsen: In Greece, wise men speak and fools decide Saxo
…it is not going to be the final word in this Greek debt crisis as the drama will develop into a full blown Greek Tragedy by May/June.

For Greece, Bailout Two Is Just The Beginning ZH
Because heaven forbid someone actually ask for details as to just what '€[xxx]' of future funding needs over and above the €320 billion in committed funding means in practical terms

A Greek Default Doesn’t Need To Be Chaotic For Greece TF Market Advisors
The only questions that remain to be resolved are these: have all of the parties begun preparations to mitigate the ultimate impact of an outright default by Athens? And will the ECB be sufficiently aggressive in combating the inevitable speculative attacks on the other members of the euro zone periphery, which are almost certain to ensue, once Greece is “resolved” one way or the other.

OTHER
It's Worse Than You ThinkTim Duy’s Fed Watch
Bullard really went down an intellectual dead end last week.  He criticized the focus on potential output, but revealed that he doesn't really understand the concept of potential output either empirically or theoretically.  He then compounds that error by arguing against the current stance of monetary policy, but fails to provide an alternative policy path.

Charting the Federal Reserve’s Assets – 1915 to 2012Gresham’s Law

Macroeconomic model comparisons and forecast competitionsvoxeu.org
Where were economists when the global recession hit? Or rather, where were their forecasts in the years before? This column argues that clearly some of the models were at fault. To correct this, it proposes a ‘comparative approach’ to macroeconomic analysis where models compete for the right to be taken seriously.

Don't expect "expected" returns Noahpinion
Why one should not expect excess returns all the time

Expensive High YieldThe Aleph Blog
Thus, it doesn’t make sense to talk about high yield bonds in terms of spreads over Treasuries.  High yield bonds react more to lending conditions, and derivatively, how well the stock market is doing.

DIVERSION
Slow Down, You Think Too FastThe Big Picture
Kahnemann: To distinguish intuitive thoughts that you can trust from those you can’t trust you really have to look at the environment and you have to look at the individual’s opportunity to learn the environment. There are some environments that simply cannot be learned because they are chaotic and too complex.

A Curated Linkfest For The Smartest People On The Web! Simoleon Sense

How Your Cat Is Making You CrazyThe Atlantic
Jaroslav Flegr is no kook. And yet, for years, he suspected his mind had been taken over by parasites that had invaded his brain. So the prolific biologist took his science-fiction hunch into the lab. What he’s now discovering will startle you. Could tiny organisms carried by house cats be creeping into our brains, causing everything from car wrecks to schizophrenia? A biologist’s science- fiction hunch is gaining credence and shaping the emerging science of mind- controlling parasites.