 |
| Europe is almost as bad as in Great Depression |
The Greek CDS auction came and went and nobody really seemed to think twice about it. And at least one chartist has noticed there is a Hulkamania-pattern in S&P 500. For my current views, see this. And now:
News – Between The Hedges
Markets – Between The Hedges
Recap – Global Macro Trading
The Closer – alphaville / FT
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
EURO CRISIS
Reflections on Buying Time: Did the ECB Buy Time? Time For What? – Mish’s
I must point out that for a time, Trichet appeared successful in containing Greece. However, time is fleeting. History will show that the ECB did not buy time for anything but a bigger disaster, just as happened with Greece.
The giant bond fund Pimco said Europe has not yet tamed its debt crisis and will soon face a “second Greece” in Portugal as the country’s economy spirals downwards.
the private sector debt seems more intractable than the public sector. Private sector debt appears 3-4 times the public sector debt. De-leveraging by both the public and private sector simultaneously is a recipe for an economic recession. It is also a recipe for social instability with unemployment finishing last year just below 23%.
The Bailout Bias – Leszek Balcerowicz / Project Syndicate
The seemingly never-ending debate over the eurozone’s fiscal problems has focused excessively on official bailouts…The key to resolving the eurozone crisis lies in properly structured reforms in the ailing countries. Indeed, experience shows that there is no substitute.
The Euro’s Imagined Community – Robert Shiller / Project Syndicate
The point is that if Europe can keep these symbols alive, even a eurozone breakup would not have the dire political consequences for Europe that so many predict.
EURO CRISIS: GREECE
There are two ways to become more competitive: become much more productive, or reduce wages and nonwage costs… Were there less painful alternatives? I do not believe there were, or are.
The Greek Tragedy, Act II – Luigi Zingales / Project Syndicate
a default in 2010 would have left some room for adjustments. Under the current plan, there is none: if the economy does not turn around quickly, Greece will need more help. But where can it go now to find it?
All I know is that if Greece doesn't get back on its feet by cutting waste and inefficiency and increasing private sector investment and jobs, the country will have a hard, if not impossible time, attracting foreign lenders.
CDS Auction
The Greek CDS auction is a non-event – Sober Look
Payout on Greek C.D.S. Is Set – DealBook / NYT
Final auction results – alphaville / FT
Final Results Of Greek CDS Auction: 21.5% Final Settlement Price – ZH
Final Results Of Greek CDS Auction: 21.5% Final Settlement Price – ZH
 |
| What if there's no QE3? |
ASSET CLASS VIEWS
"This Time It's Different?" – ZH
David Rosenberg lists the reasons for optimism and the risks, very good talk.
David Rosenberg lists the reasons for optimism and the risks, very good talk.
Do High Yield Bonds Know Something Stocks Don't? – ZH
Bond market is not sharing the stock market’s optimism
 |
I believe that the “SALE” sign in the stock market has been taken down and it is back to full price weekdays, not Sale Sunday on the Street. Bonds and cash are obviously not cheap either. So, as it goes in the field of conventional investments, pick your poison. We may muddle through-or better.
STOCKS: The two main drivers of equity volatility – Macronomics
credit availability and revisions of earnings forecast estimates
STOCKS: Operation Twist Is Coming To An End: A Preview Of The Market Response – ZH
if Operation Twist ends without a new program beginning, investors will likely expect a drop in equities (broadly) of 8-10%
BONDS: Schnautz 'Not Keen' on 10-Year Notes for Medium Term – BB (mp3)
The patterns of gold holding remain a debatable topic at times when the relative price of gold has appreciated while the global economy has experienced recessionary effects. This column studies the curious patterns of gold holding and trading by central banks from 1979 to 2010. It suggests that a central bank’s gold position signals economic might, and gold retains the stature of a ‘safe haven’ asset at times of global turbulence.
 |
| Nice take from economistmeg.com |
ECONOMICS
Monetary policy: Show us that you mean it – Free exchange / The Economist
The Fed has tried to have it both ways all through this recovery, loudly insisting that it has both the tools and the desire to meet its mandates while also declaring that inflation above target—even for just a year or so—is unacceptable.
The Output Gap Debate Continues – Tim Duy’s Fed Watch
CHINA
 |
| China catching America |
OTHER
Knight Unveils Enhanced Sumo Algo – Advanced Trading
New trading formula uses size discovery and signal-based trading to serve high-frequency traders.
40 Under 40 Hedge Fund Rising Stars - profiles in full – Financial News
A top CDS trader quits the CDS market – Felix Salmon / Reuters
Fixed-income traders never want to rely on luck and fortune when it comes to things as important as default protection. And so Heller, for one, is out of the market completely
How Wall Street Deals With Conflicts – DealBook / NYT
Ultimately, the rule of caveat emptor — let the buyer beware — is how conflicts of interest are dealt with on Wall Street. If you know the person on the other side of the deal is looking to take you for all your worth, then you will be much more wary about the terms of any transaction.
Muppets 1 Gollums 0 – The Daily Capitalist
But if it causes investors (be they muppets or not) to re-examine their sense of trust in the system and reassess those entities most deserving of that trust, it will not have been published in vain.
OFF-TOPIC
Who Makes Money on Wall Street? – Altucher Confidential
“I have a method that beats the stock market.” Usually it involves some moving average bullshit or there’s some new theory about commodities or whatever. It’s all BS. NOTHING works. Let me repeat it a different way: YOU ARE NO GOOD. You’re not even a good person. You’re arrogant and rude. You smell.
S&P 500 Completing a “Hulkamania” Formation – Kid Dynamite’s World
Derivative Surprises Everyone By Accomplishing Purpose and Unwinding at Randomly Generated Market Value – Dealbreaker