No fiscal
union, no ECB loan to Spain, no ESM funding to banks – so I
guess muddling through. Next stops in the show – ECB cuts rates by 0.25% - no
more, even though 0.5% would be the right thing to do, so of course it will not
be done. I guess they are trying to push forward all the heavy lifting to the
G20-meeting in mid-June. There will be plenty of announcements coming - the 'announcement game' is a cheap way to mess with the markets and stop anyone from taking too aggressive positions against the eurodream.
Outside the two main events (ECB and G20) trade the news - go against impressive-sounding headlines. We've already got the Chinese about to ease some more, then the ECB loan to Spain, then the economic union, deposit guarantee... They cannot use IMF anymore, as they basically used that card already. Any ideas what to expect? And now to the regular links and select articles.
News – Between
The Hedges
Markets – Between
The Hedges
Recap – Global
Macro Trading
The Closer
– alphaville / FT
Market
Commentary – A
View from My Screens
Commodity
Commentary – Commodity Trader
Tyler’s European Summary – ZH
European
Bloodbath Continues
Tyler’s US Summary – ZH
Gold Rips And Stocks Dip As Risk Assets
Recouple To Reality
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
EU should
move towards a full economic union with a banking union, integrated financial
supervision and single deposit guarantee scheme? I have a funny feeling that this is exactly what’s going to happen, but
that implementation is going to be carefully timed so that it happens after
Grexit, and not before. First you wait for Lehman Brothers to go bankrupt, then
you give investment banks full access to the Fed discount window.
Germany Shoots Down European Union "Envisagings" Of Bureaucrat Utopia – ZH
The German government on Wednesday reaffirmed its opposition to allowing ESM to directly lend to troubled banks in the Eurozone.
The German government on Wednesday reaffirmed its opposition to allowing ESM to directly lend to troubled banks in the Eurozone.
Creditors and Bureaucrats Push Back – Marc
to Market
The financial crisis has called into question
political and economic orthodoxies… the creditor nations, led by Germany, are
preparing a response…the essence of the German proposals seem to be scaling up
the strategy employed when the Berlin Wall fell
Barclays on Europe-Wide Deposit Guarantee
Scheme – ZH
Quick guide from Barclays: the euro-wide plan would rely on commitments, not upfront payments. Also, redenomination risk is not addressed.
Quick guide from Barclays: the euro-wide plan would rely on commitments, not upfront payments. Also, redenomination risk is not addressed.
Bracing for a Euro Crash and Creating A Housing
Bubble– Testosterone
Pit
Switzerland, a speck of land with 7.9 million
people surrounded by Eurozone turmoil, has been bracing itself, according to
the President of the Swiss National Bank and long-time euro-skeptic Thomas
Jordan, for the collapse of the euro.
EURO CRISIS: PIIGS
Charts by
Goldman Sachs.
An Argentine Guide to the Greek Crisis – Project
Syndicate
How large will the devaluation of the
neo-drachma be? In Argentina, the number of pesos needed to buy one dollar rose by more than 300%. Greece posted a
current-account deficit of nearly 10% of GDP in 2011, despite the domestic
depression. The real devaluation necessary to restore external balance will be
enormous, perhaps larger than that in Argentina.
OTHER
The Good, Bad, And Ugly Of Emerging Markets – ZH
UBS ranks the emerging markets based on risk.