|From the Macrowonders' post, linked below.|
Boring day. Announcement games, as I wrote earlier. The verbal intervention is often a more powerful weapon than the real thing. If the ECB would intervene, there would be no more a threat of the intervention. Anticipation of violence (or violent losses) hurts a lot - fear and greed, grandpa tells 'ya, fear and greed.
An actual SMP purchase campaign would not really help Spain, as after the Greek PSI haircut it is obvious that any support now would only hurt bondholders more in the future.
But why the market reaction has been so muted? Is the market truly that bearish (the liquidity meters are not yellow yet, so probably no)? I believe the market is just waiting for the IMF and G-meetings, and especially the French elections. After that there will be a proper summit, and our dear leaders will show their hand. I just hope it will not be more muddling through. So low-conviction, low-volume spedeily for now, as we say in Finland. Means a lot of noise but not much happening.
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Thought of the Day: Apple's market cap is larger than the combined market cap of companies in Spain, Portugal, and Greece.
News – Between The Hedges
Markets – BetweenThe Hedges
Recap – GlobalMacro Trading
The Closer – alphaville / FT
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
Eurozone Chutzpah and the IMF – Project Syndicate
Simon Tilford: Many European leaders believe that the rest of the world owes the eurozone a bailout because the currency union is just an innocent bystander…This rationale highlights the core of the problem: the eurozone is institutionally incomplete, and eurozone policymakers continue to blame investors for pointing this out.
Reversing Europe’s Renationalization – Project Syndicate
George Soros: The Bundesbank will never accept these proposals, but the European authorities ought to take them seriously. The future of Europe is a political issue, and thus is beyond the Bundesbank’s competence to decide.
EURO CRISIS: PIIGS
Europe's 'Off-The-Grid' Economy And Why PIGS Might Fly (The Euro) – ZH
36 South Capital Advisors: So here we sit watching a couple of PIGS not trying consciously to fly but flapping their baby wings anyway. We watch on, content in the knowledge that PIGS can’t fly…Until, that is, the first one takes flight.
Italy - Spain rift over contagion risk – Sober Look
Italy and the Eurozone as a whole are clearly nervous about Spain sparking another liquidity crisis. Monti has made quite a bit of progress in Italy (with Italian long-term yield now firmly lower than the Spanish yield), but he may be looking at a massive setback driven by Spain. He should be angry.
Some colour on Spanish property prices – The Trader
very nice charts
Déjà vu all over again – Saxo Bank
Steen Jakobsen: It seems that the long awaited payback to: extend-and-pretend policies has started. The list of problems is forever increasing, but my ranking is Spain, French election, bad economics, lack of policy tools
Bernanke is making us bounce the 0 inflation line – Macrowonders
…we are one of the few who believe Ben Bernanke is doing what he can to save the economy from Deflation. The measures he is taking are not everyone's taste but the alternative is far worse.
Look Who’s Back – The New York Magazine
John Mack is no longer at the top of Morgan Stanley. So he’s getting his fix elsewhere.
UBS’s Golub Says Bull Market for Stocks Is Not Over – BB (mp3)
UBS’s Walker Is ‘Moderately Bullish’ on Greenback – BB (mp3)
Commerzbank’s Dixon Says Oil Is Near Fair Value – BB (mp3)
Deutsche Bank’s Riccadonna Sees ‘Inflation Pressures’ – BB (mp3)