Google Analytics

Wednesday, June 6

6th Jun - US Close: ECB Stood Still

ECB did nothing. Hopes are on Bernanke’s address tomorrow. Heavy rumors that Germany is setting up a bailout of the Spanish banks, but this could also be announcement games. I stick to my original view (risk-on during the early part of the week, risk-off towards the weekend)

Follow ‘MoreLiver’ on Twitter or Facebook.  

News – Between The Hedges
Markets – Between The Hedges
The Closer – alphaville / FT
Market Commentary – A View from My Screens
Tyler’s European Summary – ZH
  Europe Rips As Money Grows On German Trees Again
Tyler’s US Summary – ZH
  Form Worst To First - S&P Has Best Day Of 2012 Shortly After Worst

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

Brussels: 'Banks should pay for banks'euobserver
proposals designed to change the too-big-to-fail rationale that has seen billions of euros of tax payers' money pumped into Europe's ailing banking sector.

When strategy is mistaken for stupidity, the curious case of eurozone politicians alphaville / FT
Richard Barwell of RBS wishes to point out that policymakers aren’t idiots. They are rational actors acting on the basis of their particular ‘loss functions’. The behaviour dictated by those functions will determine the outcome of the crisis.

Let’s all play a game of “Soros says”alphaville / FT
He doesn’t like modern economics all that much and thinks the eurozone is going down a road towards German empire, necessitated by Target2 imbalances, unless something extraordinary happens soon.

Mario Monti’s Nordic DreamProject Syndicate
As the EU’s top competition official a decade ago, Mario Monti was regarded as a very Anglo-Saxon regulator. Today, he is the most Nordic prime minister that Italy has ever had – in a country where politics and society remain anything but Nordic.

Germany Grapples With Role in RescueWSJ
As Europe careens deeper into political and economic crisis, the immediate survival of the euro turns more than ever on a single question: Will Germany act?(very nice interactives)

Huge Nannycrat Conflict Coming Right Up; France Pension Reform Takes Giant Step BackwardMish’s
So when is Merkel going to tell Hollande that France should be raising the age to 67? When is Merkel going to tell France that crop subsidies have to end? When is Merkel going to tell Hollande labor reform is needed and there needs to be a provision for firing workers easier?

From Krugmania to Draghia: Five ways to save the euro zoneWonkblog / WP
new report from the analysts at ING, who outline six possible endgames for the euro zone.

Report: Rampant corruption is aggravating EU crisiseuobserver
Corruption and lack of transparency are endemic in the EU and have direct links to the financial crisis, a leading NGO says.

Panic has become all too rational Martin Wolf / FT
Before now, I had never really understood how the 1930s could happen. Now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate and failure to stay ahead of events.

The Restaurant At The End Of The EurozoneMark Grant / ZH
Now the group is once again at the table ordering lunch and desert has come and gone and everyone is sitting there looking at everyone else. No one is volunteering to pay the bill; no one knows who will pay the bill.

EU Expects Spanish Bank Bailout Loans To Be Double The €40 Bn Previously DisclosedZH
Senior Spanish banking executives have put the figure at about €40bn, but EU officials have been looking at plans that are at least double that, according to people briefed on the discussions.

Germany finalizing face-saving aid deal for SpainReuters
A deal is in the works that would allow Spain to recapitalize its stricken banks with aid from its European partners but avoid the embarrassment of having to adopt new economic reforms imposed from the outside, German officials say.

EU, Germany exploring Spanish rescue, no request yetReuters
Germany and EU officials are urgently exploring ways to rescue Spain's debt-stricken banks although Madrid has not yet requested assistance and is resisting being placed under international supervision, European sources said on Wednesday.

The Fund in Spain?The World / FT
Could the IMF help bail out
Spain? Tricky one. As goes the EU, so goes the IMF, only more so.

Another Spanish Bailout Plan Taking Shape As Germany FoldsZH
A deal is in the works that would allow Spain to recapitalize its stricken banks with aid from its European partners but avoid the embarrassment of having to adopt new economic reforms imposed from the outside, German officials say.

Introductory statement to the press conferenceECB

Eurosystem staff macroeconomic projectionsECB (pdf)

ECB Leaves Benchmark Rate UnchangedTIME

Draghi Sees Increased Risks to EconomyWSJ

Draghi Says ECB is Ready to Act as Growth Outlook WorsensBB

It's your job to fix crisis, ECB tells governmentsReuters

No cut in June – case for summer cut intactDanske Bank (pdf)

Count Draghi: Ten PointsMarc to Market

Draghi gives a new meaning to "behind the curve"Sober Look

Draghi: Nobody can force Spain to seek bail-outeuobserver

Here’s How to Read Mario Draghi’s Poker FaceMarketBeat / WSJ

Draghi's on how to mend the euro: It's the politics, stupido!The Economist

Hanging By a Thread and Inflation in EuropeTF Market Advisors
By doing nothing, he caused the Euro to sell-off, which as far as I can tell is inflationary. Europe seems to be in a perverse situation that printing money would actually likely help the Euro and thus be deflationary. I think he missed a big chance to implement some policy before the crisis has become full blown.

Doing Their Best to Destroy EuropeKrugman / NYT
I don’t think there’s any conceivable economic logic for the ECB’s decision. It can only, I think, be understood as some kind of refusal to admit, even implicitly, that past decisions were wrong.

The Urge to PunishKrugman / NYT
This doctrine has an undeniable emotional appeal to people who are themselves comfortable. It’s also completely crazy given everything we’ve learned about economics these past 80 years. But these are times of madness, dressed in good suits.

Morgan Stanley Sees QE3 Rally Lasting Hours Not WeeksZH

Drumbeat’s Getting Louder: the Fed Must Save the WorldMarketBeat / WSJ

The rally: deal or no deal?The Economist
One senses that the markets will respond to any official action that is perceived to be sufficiently substantial and, just as important, immediate. Plans for stabilising the banking system in five years' time are not going to do it.

Gold In Full Blown QE ModeGlobal Macro Monitor
The yellow metal is up almost $100 since last Friday’s weak U.S. employment report.

A Central Banker Utters The TruthTestosterone Pit
No-one is having fun at the moment.

Lloyds’s Schmidt Sees More Asset Purchases by FedBB (mp3)

RDQ’s Ryding Says Fed Will Extend Operation TwistBB (mp3)

IMF Research Bulletin June 2012IMF (pdf)

Follow ‘MoreLiver’ on Twitter or Facebook.