Seems the European focus will shift after the Sunday's elections to the June EU summit. Good question what will happen to Spain meanwhile. I guess the plans to recapitalize the banks via ESM are still under construction. Perhaps with some bond buying by the ECB and light auction loads the muddle-through strategy could continue for some weeks or even months now. But Spanish pain is still inevitable.
During the
weekend I posted the following:
29th Apr - Weekender: Off-Topic – not related to finance or
markets
29th Apr - Weekender: Trading &
Research -
views, quant stuff, people, education
29th Apr - Weekly Support - weekly reviews and previews
28th Apr - Best of The Week best from my last week’s posts
You can get
update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.
News And
Market Re-Cap – RanSquawk
/ ZH
Frontrunning:
April 30 – ZH
Overnight
Sentiment: – Bank of
America / ZH
The Lunch
Wrap – alphaville
/ FT
EM New York
headlines – beyondbrics
/ FT
Morning
MarketBeat: No Cheer for Stocks – MarketBeat
/ WSJ
Morning
Take-Out – DealBook /
NYT
AM Dear
Dairy – Macro
and Cheese
Morning
Preview Collection – Between
The Hedges
Spain in recession once again – Kiron
Sarkar / The Big Picture
Daily Press
Summary – Open Europe
EC
working on “growth plan” to attract 200bn in investment; Money left in EU
bailout fund guaranteed by all member states could be used as leverage
Banking
union and “growth compact progressing behind the scenes. Also discusses the IMF
increase and European monetary policy briefly.
The Future of the Euro: Why Sentiment Alone
Can’t Save the Union – TIME
If Europe doesn’t fix the economy of the monetary union, the economic problems of the euro zone could undercut the political will to save it. That process may already be starting. Whatever Europeans like to think the euro represents, in the final analysis, it is an economic instrument with economic consequences. And the euro will live or die based on its economic results and impact.
If Europe doesn’t fix the economy of the monetary union, the economic problems of the euro zone could undercut the political will to save it. That process may already be starting. Whatever Europeans like to think the euro represents, in the final analysis, it is an economic instrument with economic consequences. And the euro will live or die based on its economic results and impact.
European Money Up, Loans Down; Or Why The LTRO
Is Still A Failure –
ZH
Goldman Sachs: Lending to private, non-financial corporates declined by EUR5.5bn. Loans to households grew by EUR6.1bn (after last month’s flat reading), but remain well below the average monthly gains of EUR17bn over the series’ history. While it is still too early to fully assess the effectiveness of the ECB’s recent non-standard measures - with three months of data now available since the inaugural 3-year LTRO – there is no evidence, at least so far, that the liquidity provided led to any rebound in the lending dynamics to the real economy.
Goldman Sachs: Lending to private, non-financial corporates declined by EUR5.5bn. Loans to households grew by EUR6.1bn (after last month’s flat reading), but remain well below the average monthly gains of EUR17bn over the series’ history. While it is still too early to fully assess the effectiveness of the ECB’s recent non-standard measures - with three months of data now available since the inaugural 3-year LTRO – there is no evidence, at least so far, that the liquidity provided led to any rebound in the lending dynamics to the real economy.
Tumultuous euro zone week – MacroScope
/ Reuters
...hopes that the ECB cavalry will ride to the
rescue are wide of the mark, until and unless the crisis takes a distinct turn
for the worse... But we are alive to any initiatives, which are due to be
trumpeted at a June EU summit. So far, it looks like the focus remains on
structural reforms
Interactive EU Recession Map – Thomson Reuters
EURO CRISS: ECB
More on secret liquidity inside eurozone secret
liquidity – alphaville
/ FT
For every 10 euros of the European Central Bank’s now almost €1,200bn of ‘normal’ liquidity supplied to banks, picture one euro of Emergency Liquidity Assistance from national central banks. Now imagine there’s just under 10 cents within the ‘ELA’ euro which are even shadowier.
For every 10 euros of the European Central Bank’s now almost €1,200bn of ‘normal’ liquidity supplied to banks, picture one euro of Emergency Liquidity Assistance from national central banks. Now imagine there’s just under 10 cents within the ‘ELA’ euro which are even shadowier.
ECB Deposits Rise To Most Since Early March – ZH
UBS: the German banking system has become a bigger and bigger depositor over the period, while the Spanish and Italians have become very heavy borrowers...non-domestic ownership of Spanish and Italian government bonds has been declining rapidly in recent months. The euro is being deconstructed from within; facilitated no doubt unwillingly by the ECB.
UBS: the German banking system has become a bigger and bigger depositor over the period, while the Spanish and Italians have become very heavy borrowers...non-domestic ownership of Spanish and Italian government bonds has been declining rapidly in recent months. The euro is being deconstructed from within; facilitated no doubt unwillingly by the ECB.
EURO CRISIS: PIIGS
Spanish banks: Irish levels of losses would
take down 'Cajas' –
Saxo
Bank
The base scenario - applying Irish levels of
losses - would take down many of the Cajas, and in our study Banco Popular and
Banco De Sabadell would be in serious trouble. Looking at a further fall in
housing prices and losses, the picture quickly turns really nasty. The five
largest Spanish banks alone would need to raise at least Euro 50bn to
stay afloat.
Spain Officially Double Dips, Joins 10 Other
Western Countries In Recession – ZH
Deutsche Bank: If it were us in charge we would allow more defaults which would speed up the cleansing out of the system thus encouraging a more efficient resource allocation in the economy at an earlier stage. However this could result in a major short-term growth shock which no politician could tolerate. So with our politician's hat on the best strategy seems to be steady but committed structural reforms, gradual austerity but with a free flowing unconditional central bank. Europe isn't there yet and is unlikely to get there in a hurry.
Deutsche Bank: If it were us in charge we would allow more defaults which would speed up the cleansing out of the system thus encouraging a more efficient resource allocation in the economy at an earlier stage. However this could result in a major short-term growth shock which no politician could tolerate. So with our politician's hat on the best strategy seems to be steady but committed structural reforms, gradual austerity but with a free flowing unconditional central bank. Europe isn't there yet and is unlikely to get there in a hurry.
Give Austerity a Chance. Spending for Growth
Already Failed. – TF Market Advisors
Overview of
Spain, Italy and Portugal. This is a difficult time. It took years, if not decades to create this
mess, and will take years to fix, and spending alone won’t help, because growth
is not that easy to find. If it was, there would be 1000′s of companies like AAPL, but there aren’t, and it is less
likely the government will find growth than companies.
OTHER
This is your divergent recovery, charted – alphaville
/ FT
The recovery in advanced economies has been on
the path to become the weakest one compared to past recoveries... In
contrast, the recovery in the emerging market economies has been the strongest
to date.
Links and
summaries of recent articles
Black Scholes and the formula of doom – alphaville
/ FT
For a good part of Saturday, the article with
the above sentence was among the Most Read on the BBC News website. Not bad for an
article about option pricing.
Cross-sectional skewness and kurtosis: stocks
and portfolios – Portfolio
Probe
It seems that skewness and kurtosis of
portfolios can come unstuck from the skewness and kurtosis of the underlying
universe. Any ideas why?
OFF-TOPIC
Married… With Children Around the World – Neatorama
The concept, characters, and even scripts from
the original Fox series have been remade in countries all over the world.
Machine Politics: The man who started the
hacker wars – The
New Yorker
In the summer of 2007, Apple released the
iPhone, in an exclusive partnership with A.T. & T. George Hotz, a
seventeen-year-old from Glen Rock, New Jersey, was a T-Mobile
subscriber. He wanted an iPhone, but he also wanted to make calls using his
existing network, so he decided to hack the phone.