18th Apr - Blame Canada

Where is Knight Rider when you need him?

Where is Knight Rider when you need him? It begins to look probable that Spain will get a bank bailout from the EFSF. IMF will not (or at least should not) touch a case where the debts have not yet been restructured or given a good haircut. The accumulated debts through Target2 and LTRO are simply too large for the ECB to take care of, and politically it is much easier to make a case for a bailout than recapping the Eurosystem.



Why is this politically easier? Because taking the losses and recapping the proper institutions would show that the currency system is and has been malfunctioning. That is one thing the eurocrats do not want to admit - or let the voters understand. With EFSF bailout, everything can still be blamed on the periphery.

News And Market Re-Cap – RanSquawk / Zero Hedge

Frontrunning: April 18 – Zero Hedge

The Lunch Wrap – alphaville / FT

EM New York headlines – beyondbrics / FT

Morning MarketBeat – MarketBeat / WSJ

Morning Take-Out – DealBook / NYT

Daily Press Summary – Open Europe

  Sarkozy: ECB should discuss euro’s exchange rate with governments; La Tribune: The Merkozy couple has committed suicide

TV: Bloomberg, CNBC, BBC

Debt crisis: live – The Telegraph

Europe Crisis Tracker – WSJ

Tracking Europe’s Debt Crisis – NYT

FX Options Analytics – Saxo Bank

EURO CRISIS

The Italian job – MacroScope / Reuters

Quick and efficient summary of the current news flow: The drive to find $400 billion or more of new crisis-fighting funds for the IMF seems to be slowly falling into place.

Strategic Briefing: Is Euro Risk On The Rise Again? – The Capital Spectator

Summaries of and links to nine recent articles

IMF: Global economic recovery fragile and risk of relapse high – The Guardian

Disorderly default and exit by eurozone member could spark market panic and cause bigger crisis than after Lehman collapse, IMF says in World Economic Outlook report

EU on Greek statistics scandal: 'Never again' – euobserver

The EU commission has proposed new rules on how to shield national statistics bureaus from political influence, three years after Greece lied about its deficit, triggering its first bail-out and marking the start of the eurozone crisis.

A gratuitous post on France – alphaville / FT

Just in case anyone thought we’d gone soft on Sarko…(nasty comments from Credit Suisse)

CHART OF THE DAY: The Run On Spain – BI

Deposits leaving the country, thus banks unable to buy sovereign debt and the Eurosystem is the only supporter of the Spanish financial system. Eurosystem will probably protect itself from losses by instituting bailouts and not allowing any private defaults.

OTHER

The Next Global Crash: Why You Should Fear the Commodities Bubble – The Atlantic

Investors have gone crazy for commodities, pouring money into everything from oil to copper. Just like the world's mania for tech stocks in the 1990s, this boom is headed for a bust.

Top 25 Traders On Twitter - optionstradingiq

OFF-TOPIC

Beware of Franklin’s Gambit in making decisions – John Kay

…the process of making or finding a reason for what one already has a mind to do. Franklin’s Gambit was implicated in the two most serious policy disasters of the past decade; the Iraq war and the financial crisis of 2007-08.

"Hitler Speed" crossing borders – Presseurop

Frankfurter Allgemeine Zeitung: Traffickers working the Czech border with Germany no longer handle beer and spirits, but methamphetamines. Different laws in the two countries complicate the job of the police.