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Wednesday, June 13

13th Jun - US Close: More bailouts!

Italy is definitely getting more attention now…meanwhile, Cyprus is about to request a bailout, and Greece is again running out of money. It will be a fun summer. For the latest on "Bailando", see the updated Spanish Bailout: The Collection.

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News Roundup – Between The Hedges
Markets – Between The Hedges
The Closer – alphaville / FT
Market Commentary – A View from My Screens
Tyler’s European Summary – ZH
Tyler’s US Summary – ZH

  Market Shrugs Off Dimon Premium As Treasuries Lead Risk Lower

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

EURO CRISIS
The Greek Election is Irrelevant but FROB Isn’t TF Market Advisors
Does the Greek Election Still Matter? - Evidence suggests FROB is a major shift in the EU attitude - Italy is NOT borrowing at 6% to lend to Spain at 3% - Contingent Liabilities - JPM and the Whale Tale

The Absolute Moron’s Guide to the Euro Crisis –New York Magazine

Central bankers vs. politicians: High-stakes chicken? MacroScope / Reuters
More to the point, if the FED or the ECB step up, yet again, to protect their economies from the global slowdown, will it take U.S., German, Spanish, Italian, Greek and other governments off the hook?

How tiny Finland could bring euro crisis to end MarketWatch
Commentary: The crisis could go from ‘Spanic’ to ‘Quitaly’ to ‘Fixit’

EURO CRISIS: BANKING UNION
Banking union in the Eurozone and the EU voxeu.org
Is Europe ready for a banking union? This column argues that the current debate is missing several key points. Chief among these is that much of what is needed for Europe’s financial system is already feasible within the existing set up.

The European Banking Union? Project Syndicate
Hans-Werner Sinn: In blatant violation of the Maastricht Treaty, the European Commission has come forward with one bailout plan after another for Europe’s distressed economies. Now it wants to socialize not only government debt by introducing Eurobonds, but also banking debt by proclaiming a “banking union.”

EURO CRISIS: GERMANY
Bond Market Debate du Jour: Whither Bunds or Wither Bunds? MarketBeat / WSJ
Pimco bond guru Bill Gross wrote: “German Bunds join the maelstrom. Very few scenarios in which they do well. Only German exit favors Bunds.”

Is Germany the next domino? MacroScope / Reuters
slide in German bunds continued into a second day and, worryingly, it was driven in part by worries about contagion after Spain’s poorly-received 100 billion euro bank bailout.

Why Berlin Is Balking on a Bailout NYT
Hans-Werner Sinn: It is unfair for critics to ask Germany to bear even more risk. Should Greece, Ireland, Italy, Portugal and Spain go bankrupt and repay nothing, while the euro survives, Germany would lose $899 billion. Should the euro fail, Germany would lose over $1.35 trillion, more than 40 percent of its G.D.P.

EURO CRISIS: GREECE
With Greece Back Down To Just €2 Billion In Cash, Zeit Suggests A Third Greek Bailout May Be Coming ZH

EURO CRISIS: CYPRUS
A bailout, quick! presseurop
It's been in the air for weeks — Nicosia is preparing to apply for €3bn to €4bn in emergency funding from the EU in order to recapitalise its struggling banks, highly exposed to Greek debt. But time is running out, writes the English-language Cyprus Mail.

Europe Bailout #5 Is In The Books ZH

EURO CRISIS: ITALY
Italian Paradox: Italy is Borrowing money at 4-5% to Lend to Spain at 3%; Official Denials From Italy That Italy is Next Mish’s
In retrospect the word "paradox" is wrong. Ponzi scheme is more like it, and the scheme is ultimately backstopped by Germany.

Italy’s Inconvenient Truth MarketBeat / WSJ
Austria's finance minister set off a row when she suggested Italy may need support.

Italian Bonds Back In The Crosshairs ZH
After a few days in a row of Italian bank stock halts, the implicit LTRO-driven relationship between banks and sovereign is snapping 10Y yields above their Aug 2011 crisis peaks - at almost 5 month highs.

Italian press gets behind Monti amid bailout rumours presseurop
Rumours that Italy, in the wake of Spain, may demand financial assistance from the EU have been vigorously denied, in particular by the head of government.

Standard’s Barrow Says Dynamics in Italy `Look Bad’ BB (mp3)

OTHER
Peak oil and price incentives EconMatters
Here I describe some interesting new research on modifying Hubbert's model of peak oil to take into account the incentives for additional production that higher oil prices would be expected to bring.

Meine Damen und Herren – the government guarantees alphaville / FT
new OECD report estimating the value of implicit sovereign guarantees for reducing the cost of bank debt…

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