Here are
the US open links plus plenty of article links on
euro crisis. All eyes on the Wednesday's EU summit that is hoped to present some plans to solve the current mess. As Germany will not budge, all they will have to show for the meeting will be some pocket change for infrastructure project bonds and a possible easing of the budget constraints. I don't see how this would help anyone, as the project bond amounts will be small and what the periphery lacks is definitely not more construction. Budget constraints have already been broken, giving permission to do it after the fact is hardly earth-shattering stimulative action.
Before ECB prints and backstops, the show will go on. Meanwhile, ELA lending from ECB to Greece is calculated to have passed the 100 billion euro mark.
Frontrunning
– ZH
The Lunch
Wrap – FT
EM New York
headlines – FT
Overnight
Summary – Bank
of America / ZH
France and Germany set for showdown over eurobonds and Schäuble's
candidacy to lead the Eurogroup;Vincenzo Scarpetta: Eurobonds are no
easy fix for the euro crisis
Morning
MarketBeat: Stock Bounce Could Be Fleeting – WSJ
Broker Note
Briefing – WSJ
Morning
Take-Out – NYT
AM Dear
Dairy – Macro
and Cheese
US Open: Correction
within Correction – Marc
to Market
The T
Report – TF Market Advisors
Pre-market
Commentary – Marketwatch
Pre-Market
Trading – CNNMoney
Pre-Market
– NASDAQ
US Equity Preview – Bloomberg
Earnings
& Events – The
Street
MarketCurrents
– Seeking
Alpha
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS: GENERAL
All eyes on Wednesday EU summit – MacroScope
/ Reuters
EZ bonds,
ECB’s bond purchases and union-wide bank deposit insurances are opposed by the
Germans. Probably only EIB capital increase and some project bonds come out of
the summit.
Merkel Heads for Debt Showdown With Hollande at
EU Summit – BB
What is the long-term euro vision? – Hugo
Dixon / Reuters
The crisis has demonstrated that the current
system doesn’t work. But a headlong dive into a United States of Europe would be bad politics and bad economics. An alternative, more
attractive vision is to maintain the maximum degree of national sovereignty consistent
with a single currency. This is possible provided there are liquidity backstops
for solvent governments and banks; debt restructuring for insolvent ones; and
flexibility for all.
The not-so-creeping process of de-euroisation – alphaville
/ FT
The de-euroisation continues and is, in Italy at least, getting faster… these charts show foreigners running away from Italian liabilities in March at their fastest pace ever, and illustrate just how quickly the LTRO sheen has faded.
The de-euroisation continues and is, in Italy at least, getting faster… these charts show foreigners running away from Italian liabilities in March at their fastest pace ever, and illustrate just how quickly the LTRO sheen has faded.
The Euro Awaits Its Verdict – Project
Syndicate
Simon Johnson, Peter Boone: These countries may eventually decide to leave. And, even if they don’t
make that choice, fear of such exits can easily become self-fulfilling. The
euro system was designed to deliver prosperity and stability for all. It has
clearly failed for some countries, and it may fail for many. Severe
mismanagement by European politicians has caused damage that will last for
decades.
The EU says the Grexit firewall is ready. But
It's not even properly agreed. And even if it was ready, it's too small. What
is really needed is an end to the crisis. Not just words about how the euro is
for ever and no one is quitting and everything is in hand. A real gesture is
needed. That has to come from Germany. And it's going to cost Germany. But that is the price for the Euro.
The Confiscation Conundrum in Europe – Testosterone
Pit
Corporate
tax rates are trending down, while personal taxes and VAT are going up, with
the total share of taxes over GDP increasing.
‘Cranky Extremists’ – The Bully-boy Chorus
begins. – Golem
XIV
The banks and our present rulers have agreed
between them that the decisions made, not just by elected leaders, but also
those colossal decisions taken by unelected ‘experts’ at central banks and
financial quangos, to print or borrow money in order to bail out the private
banks and their private debts – decision made without any recourse to the
people-expected-to-pay (the public) and often without even a public discussion,
that those decisions should be legally binding and irreversibly above the will
of the people.
Completing the euro project: The day after
tomorrow – ECB
José Manuel
González-Páramo, Member of the Executive Board of the ECB, London, 18 May 2012
EURO CRISIS: GREECE
Greek Voters Need to Look Beyond the Lies of
Bloomberg, Merkel, ECB, IMF, Ekathimerini; Greece Nightmare Coming or
Already at Hand? – Mish’s
Greece and Iceland are not the same. Iceland has exports and a work ethic. However, the facts show that Iceland recovered far faster because it had the courage to default, telling
eurocrats where to go. Simply put, Greece has nothing to lose
and everything to gain bu exiting the euro, the exact opposite of what
Bloomberg and most of mainstream media would have you believe.
German bank tables plan for parallel Greek euro – euobserver
Germany's financial giant Deutsche Bank has
floated the idea of a "geuro" - a parallel currency allowing Greece to devaluate while
staying in the eurozone if an anti-bail-out government takes over in Athens.
Why A Greek Exit Could Be Much Worse Than
Expected – TIME
More than one kind of damaging domino effect is
possible if Greece is forced to abandon the euro… Think of
what it would mean for the other countries in the euro zone. How could the
Italian government persuade its people of the need for higher taxes or the
Spanish government explain soaring unemployment if Greece were obviously better
off outside of the euro zone. Result: The entire European Union might unravel,
with financial consequences many times greater than those resulting from Greece alone.
Forget The "Bazookas": Here Come The
"Tomahawks" And "Howitzers" - An R-Rated Walk Thru The
Greek Endgame – ZH
Allowing the Greek people to access all their
Euros physically, while still holding the option to default on June 17th, is
insane. She and the ECB would NOT be acting in the best interest of the
Eurozone if they let this happen - there would be 300b in Target2 losses to
split up between 16 member NCBs if the Greeks choose to leave after taking out
all the Euros. If she gives the directive to shut off the ELA early she will at
least keep the Target2 losses to 150b.
Secret Central Bank Aid Props Up Greek Banks – FT / CNBC
By scouring ECB and national central bank
statements analysts, have since pieced together more details. Analysts at
Barclays, for instance, reckon Greece is now using €96
billion in ELA, with Ireland accounting for another €41 billion and Cyprus €4 billion. If
correct, total ELA in use has exceeded €140 billion — more than 10 per cent of
the amount lent to eurozone banks in standard monetary policy operations.
Time to plan a velvet divorce for the euro – Gideon
Rachman / FT
As I read the umpteenth article on the
“Grexit”, a phrase from the film ‘Marathon Man’ ran around my head. In this cult-thriller, Laurence Olivier plays
a war criminal turned dentist who tortures Dustin Hoffman by drilling through
his dental nerves without anaesthetic. As he does so, he asks repeatedly “Is it
safe?”
Is the euro ending or beginning? – bruegel
In the end, the leaders at that time –
especially German Chancellor Helmut Kohl and French President François
Mitterrand and his successor, Jacques Chirac – set forth to sea in a light
vessel. On the economic front, they agreed on only a bare-bones Economic and
Monetary Union built around monetary rectitude and an unenforceable promise of fiscal
discipline. On the political front, they did not agree at all, so the creation
of a European polity remained stillborn.
Life after the euro – Sober Look
This tells us that the only way such an exit is
even possible is by restructuring the euro liabilities by re-denominating them
into the domestic currency. Such restructuring would be akin to default, but at
that point trying to make claims against these nations in foreign courst may be
futile.
OTHER
Weekly Market Comment: Liquidation Syndrome – Hussman Funds
20 European stocks to consider in crisis times – Saxo
Bank