EURO CRISIS: GENERAL
On Contagion: How The Rest Of The World Will Suffer – ZH
Lombard Street’s piece: Insolvency will keep dragging the EA economy down until sovereign and bank balance sheets are repaired. Eliminating the Ponzi debt without fracturing the entire credit system is impossible.
Lombard Street’s piece: Insolvency will keep dragging the EA economy down until sovereign and bank balance sheets are repaired. Eliminating the Ponzi debt without fracturing the entire credit system is impossible.
Getting one’s head around TARGET2 – alphaville / FT
JP Morgan’s research note
JP Morgan’s research note
LTRO, periphery weakening, and Portugal and Spain becoming acute.
Germany, Finland and the Netherlands are the last AAA-rated countries left in the 17-member eurozone… Will Germany lose its best friend in the Upright Brigade? And if so, will this encourage Greece, Portugal, Ireland, Italy and Spain etc. to question Germany-encouraged austerity policies?
The Spanish rebellion has begun, sooner and more dramatically than I expected. As many readers will already have seen, Premier Mariano Rajoy has refused point blank to comply with the austerity demands of the European Commission and the European Council
More thoughts on the merits of leaving the euro
EURO CRISIS: GREECE
On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said.
A Greek default and exit could signal the turning point that a desperately needed new political class is waiting for.
OTHER
How all CDS are at risk of not paying out – Felix Salmon / Reuters
If you own protection on a credit, then, you’re very much in a world of caveat emptor… if you have a strategy which involves actually getting paid out on your CDS in the event of default, then you should definitely worry that the payout might not happen, even if the event of default is clear and declared. What’s more, there’s really no good way to hedge that risk.
Why I am still bullish (II) – Humble Student of the Markets
A correction is possible but not inevitable – the small-cap underperformance is still in line of normal fluctuations.
Why the Yen is swan diving – Global Macro Monitor
…there is a huge difference between quantitative easing to stimulate the economy versus monetizing bad government debt for which there is no demand… The Germans seem to be the only people on earth who fully understand this and recognize that money demand could collapse if markets realize and begin to internalize the difference. This is surely not the type of inflation Japan wants. Or maybe it does?
Fisher rejects the need for QE3 – Sober Look
The negative view of QE3 is in agreement with other more hawkish FOMC members who don’t believe such a program's benefits justify the potential risks.
Morgan Stanley's Latest 'Commodity Thermometer' – ZH
Gold and foods bullish, while metals and energy neutral or bearish.
Gold and foods bullish, while metals and energy neutral or bearish.
Don’t despair of democracy – Columnists / FT
Elections in Russia and Iran, annual parliamentary meeting in China – and these three countries are the closest protectors of Syria’s one-party state.