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Tuesday, March 13

13th Mar - US yields break higher


Bond futures breaking lower, with plenty of room to go
A bull run in stock markets.US bonds breaking down from a trading range that has lasted for several months. EURUSD in a leg down (dollar strengthening). FED did nothing - and finally, finally we are entering an era when good news is again good, not bad. I wrote about this last January. - in a stressed situation bad news is good as it guarantees QE and low rates.



Notice how Spain was forgiven the budget deficit? The latest fiscal treaty was signed 10 days ago and already the Bono Estente's are breaking it. They are given the permission to do that because... they are too big to fail and too big to bail. If there is a happy ending to this story, I would be surprised. And if the move in US bond yields continues higher - do you really think owning European bonds makes much sense, given the risks?



Some nice reads today, I felt lazy and did not summarize them all. But you are getting this for free, so any complaints to Twitter, Facebook, email and paper.li and I will send payment instructions. If you are a corporate account, I can negotiate a 40% kickback to your personal account.
 
My views:  EURUSD to continue dropping and more crisis in Europe. Portugal and Spain are the next stops, after Greece is settled.  Weak feelings that long-term yields in US moving up and stocks higher.  
 
Joke of the Day: The EU commissioner trying to stop tax cheats from hiding money in Switzerland is puzzled why Austria and Luxembourg are standing in his wayeuobserver.com


Euro Crisis Press SummaryOpen Europe
  Eurozone delays decision on size of bailout fund until end of March; Challenge against ESM submitted to Estonian Constitutional Court
MarketsBetween The Hedges
  Bank of Japan and yen, US 10-year bonds breaking down?
The Closer alphaville / FT

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

EURO CRISIS
Zur problematik der TARGET2alphaville / FT
Bundesbank thinks Target2 is not problematic – unless the Eurozone breaks up

Spain's sad futureSaxo Bank
Steen Jakobsen: Spain is the country after Portugal which is most at risk if the EU fails to make the ESM firewall big enough.

European Countries That Make You Go Hmmm…Big Picture
For those who did not read Grant Williams’ pdf report.

Competitiveness of the euro area and within the euro areaECB
Draghi speech 13-Mar says a number of countries need to increase competitiveness and ECB or monetary policy cannot help.

EU countries as divided as ever on finance taxeuobserver.com

EURO CRISIS: GREECE
Recovery lock on Greece is pricing final haircut at 76%Sober Look

Greece CDS payout cheatsheetalphaville / FT

Few Hedge Funds Gain in Greek Bond Saga?Pension Pulse

Chart Of The Day: The European Commission's Greek GDP ForecastZH

OTHER
Citi fails Fed stress testalphaville / FT
Fed Stress Test Released: Citi, SunTrust, Ally And MetLife Have Insufficient CapitalZH

Four reasons why yen weakness has nothing to do with the dollarZH
Deutsche Bank FX:  current accounts, Asia’s underperformance, appreciation consensus, BoJ surprise

VIX Plunges To 5 Year LowZH
A VIX of 15!?! Meet the New RealityVIX and more

Presenting Bridgewater's Weimar Hyperinflationary Case StudyZH

Is Dodd-Frank Too Complex to Work?HBR
Short and nicely linked piece.

China’s trade deficit is sign of things to comeBreakingviews / Reuters

$200 Oil and the Moscow-Beijing AllianceEconoMonitor
From FP: An exclusive conversation with Nouriel Roubini and Ian Bremmer on the toll of war with Iran — and why China and Russia just don’t care anymore what the United States thinks of them.

The great financial crisis: Lessons for financial stability and monetary policyECB (pdf)
158 pages, an ECB colloquium held in honour of Lucas Papademos, 20-21 May 2010

How To Start Keeping A JournalThe Kirk Report
At some point you have probably already read somewhere about the importance of keeping a trading journal. h/t Abnormal Returns

Finding alternatives to LIBORSober Look

A Complex Simplification of the CDS MarketTF Market Advisors

20 Twitter feeds all financial advisers should followInvestment News

Ray Dalio’s Former Assistant Tells AllDealBook / NYT