Not nice at all. Italy moving to the firing line and everyone is waiting for something to happen - and the only player left in town is Germany. What do they want, an union or a breakup? For Spain, see the updated Spanish Bailout: The Collection. The missing links will be updated later.
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
Morning
MarketBeat: Bailout Euphoria Didn’t Last Long – WSJ
Broker Note
Briefing – WSJ
Morning
Take-Out – NYT
AM Dear
Dairy: Turnaround Tuesday – Macro
and Cheese
Market
Summary: Euro Pressure Subsides for the Moment – Marc
to Market
The T
Report – TF Market Advisors
Pre-market
Commentary – Marketwatch
 |
| What does Germany want? |
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
Credit Suisse Explains "The Real
Issue", And Why There Is Two Months Tops Until France Is In The Bulls Eye – ZH
Given the market’s adaptive learning behaviour,
we suspect that this finesse might last two. The eventual denouement should be
flagged by symptoms of the failure of
the credit of EFSF/ESM and/or France.
That leaves Italy as the last of
southern debtor countries to be standing on its own in the face of the end of a
global credit cycle. Italy's problem is not a
deficit. It is likely to be near 4% this
year. It is also the only debtor to be
running a primary budget (excluding debt servicing costs) surplus. The
challenge stems from the accumulation of prior deficits.
The main fear is that Italy cannot grow its way
out of a recession fast enough to pay a mountainous national debt. Other
concerns include the fact that Italy, with the
third-largest euro zone economy after those of Germany and France, will have to shoulder a large portion of the bailout bill even as it
grapples with its own sharp economic downturn.
German sovereign CDS widening is a troubling
sign – Sober
Look
To an economist this raises all sorts of
questions such as what is the "risk-free rate" for the euro. And how
can German paper be viewed as risk-free when German sovereign CDS is wider than
Verizon, IBM, Pfizer, Microsoft, etc. CDS? What this tells us is that investors are
becoming concerned about Germany's growing liabilities associated with the Eurozone.
Finnish economy: worst is still ahead – Danske
Bank (pdf)
OTHER
The US and Europe have not recovered from the
2008-09 crash in part because we applied first aid, but squandered the time
those measures bought for us (at great cost).
An essential aspect of post-crash reforms is fixing our financial
systems. The bailout of Spain’s banks — expensive
for Spain’s people, easy money for the banks — illustrates the problem.