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Friday, May 25

25th May - US Open: It's the banks vs. ECB, stupid

US Open regular links and some articles. As Europe seems to be frozen policy-wise, take a look at the highlighted articles. Someone has to give in soon. All this talk about the Troika and Athens playing a game of chicken is bullshit. The true game is between the banks and the ECB. It is not about the PIIGS vs. FANGS. It is about Germany against everyone else.

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Daily US Opening – RanSquawk / ZH
Frontrunning – ZH
The Lunch Wrap – FT
EM New York headlines – FT
Overnight Summary – Bank of America / ZH
Today’s Front Pages – presseurop
Daily Press Summary – Open Europe
  Greek euro exit could put pressure on David Cameron to veto EU Treaty change; Chris Grayling: Cameron should make more use of vetoes in EU talks

Morning MarketBeat: Headline-Driven Markets Make Comeback – WSJ
Broker Note Briefing – WSJ
Morning Take-Out – NYT
Wonkbook: The bad news Brits – WP
AM Dear Dairy – Macro and Cheese
Attack of the Killer E’s, Ease, and Eeze Updated – TF Market Advisors
US Open: Calmer Tone Ahead of the WeekendMarc to Market

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
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices

The Threat of German AmnesiaProject Syndicate
Joschka Fischer: It would be both tragic and ironic if a restored Germany, by peaceful means and with the best of intentions, brought about the ruin of the European order a third time.

Draghi, the last domino fallsHumble Student of The Markets
As expected, the Latin quarter of the eurozone ganged up on Germany on the issue of eurobonds, but Angela Merkel stood fast. But Germany is becoming increasingly isolated.

Totting up Germany’s eurozone exposurealphaville / FT
Credit Suisse: 600 billion, approximately.

‘Bye Bye Basel?’, seen in the RWAsalphaville / FT
Barclays notes investors simply do not trust banks, and Basel should take note.

“Deutschlandbonds“, “hispanobonos”: What is behind national joint bonds?Deutsche Bank
Currently, there are increasing suggestions that the lower levels of governments should issue joint bonds in cooperation with the central government. In Spain, so-called “hispanobonos” have been discussed for quite some time. Representatives of some – mainly fiscally weaker – German federal states have lately suggested so-called “Deutschlandbonds”. What is the main idea behind them?

Frozen Europe Means ECB Must Resort to ELABB
The first rule of ELA is you don’t talk about ELA.

On the ECB’s attempts to ring-fence its balance sheetalphaville / FT
Standard Chartered: ECB President Draghi recently hinted that managing risks was his utmost priority, further differentiating the ECB from other major central banks (Japan, US, UK), which have shown less reluctance about conducting broad-based quantitative easing (QE).

As Bankia Bailout Costs Grow Exponentially, Is A Stealth Bank Run Taking PlaceZH
Hopefully we aren't the only ones to notice how the bailout cost has oddly doubled almost on a daily basis. Which is to be expected: After all, recall that The Bankia group, was formed in late 2010 following a merger of seven insolvent savings banks led by Caja
Madrid, which has the most exposure to Spanish real estate among the nation’s banks. The pro forma company then, under the guise of newfound solvency, turned to the stock market to raise capital after parking its worst real estate assets in the parent company. This worked for just over a year. Then Bankia itself blew up.

Bankia suspended… uniquelyalphaville / FT
The rumours circulating suggest the suspension is due to a request for more than €15bn in state-bailout funds Bankia likely is likely to make when its board meet later on Friday.

Global - Waiting for the policy response Danske Bank (pdf)

What's needed to trigger the Fed?Danske Bank (pdf)

QE Alert! Central bankers realizing they are behind the curveSaxo Bank
All macro policies are eventually proven as failures and I continue to believe that my headline “Extend-and-Pretend is becoming Pretend only” is appropriate. Time is running out, and all monetary policies are now behind the curve while structural reforms are still lacking.

Chart: Internal vs. External DevaluationASA
internal devaluation produces far more increase in unemployment rate vs. external devaluation.

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