6th Dec - Waiter, this isn't what I ordered

Wow, what a day. After the bullrun in PIIGS bonds, thinly veiled threats from S&P, heavy-duty, hardcore summit-sitting and a test-balloon of the day (how about two rescue funds?!?). Most importantly, Bundesbank is practically broke so we can almost hear the sound of coming printing by the ECB – the only LOTR in town. The commentary on the EU summits is that the published plan is in fact an austerity union, not a fiscal union. The idea was to put a fiscal union in place, but this is the best they could do - or what Merkel could do. Sarkozy does whatever he is told. 

Categories today: Euro Crisis (general), The Plans, Two Bail-Out Funds, S&P Downgrade Threat and Bundesbank is Broke. Of importance today is to understand the material in the last two.

- MoreLiver

Then to the links: 

6th Dec - Don't vet the vets

Today's headline wordplay simply means that veterans of challenging situations need not be quality-controlled. They already know their business. On that note, I take the time to thank the veterans of all sides and hope that European leaders will in future come up with better ideas to ensure peace than a common currency. Happy independence day, Finland!

- MoreLiver 

News (Tue morning) – BTH

News (Tue morning) – The Trader

Recap (5-Dec) – Global Macro Trading

Morning Briefing – BNY Mellon

Market Preview – Saxo Bank

Danske Daily – Danske Bank (pdf)

FX option vols – Saxo

TV: Bloomberg, CNBC, BBC

Markets Live – alphaville FT

Debt crisis: live – The Telegraph

EZ crisis Live blog – The World / FT

The eurozone’s terrible mistake – Felix Salmon / Reuters

The worst case scenario is that the EU kicks the can down the road with one new bailout facility after another, until it eventually gives up throwing good money after bad and imposes the restructuring which was inevitable all along. In that case, as one hedge fund manager was explaining to me last week, private sector creditors get devastated: because the EU and the ECB and the IMF won’t take any losses on their loans, all of the haircut, pretty much, will have to be borne by a private sector which accounts for only a fraction of the debt

6th Dec - Sentimental Elsa

Nomura's view on EZ devaluations

S&P has put all the eurozone countries on downgrade warning, stating the obvious. The Italian welfare minister cries while announcing pension cuts. Lot of handshaking and smiling at the press from Merkel and Sarkozy – a lot of attempt to kick the can even further, this time until March, when the EU Treaty changes would be handled. As Peter Tchir said, there must be a lot of trans-Atlantic phone calls going on at the moment. Remember what I told you about Sarkozy? WSJ seems to agree.

Finland celebrates independence day today. This is the first year when no veterans decorated with the Mannerheim's Cross (a decoration given to roughly one soldier in thousand) are able to attend the gala in the Presidential Palace. Times change. My last FX deal on the desk was in USDDEM, and I guess my first deal if I ever return to a desk will be in USDDEM as well.  Times change.

5-Dec Endless Parlay

Hello there! During the weekend I put online the Weekender - Poker face of eurocrats with review/preview stuff and an editorial on Sad Sarkozy, and a Best of the Week. In this post there are links to 2012 outlooks by both GS and CS. If I would read only two today, BNY Mellon’s morning brief and BTH’s news collection would be kings. I’m on Twitter, Facebook and you can always email me for suggestions and requests. 

                     

News – BTH

News – The Trader

Morning Briefing  – BNY Mellon

Danske Daily – Danske Bank (pdf)

Market Preview – Saxo Bank

FX option vols – Saxo

TV: Bloomberg, CNBC, BBC

Markets Live – alphaville FT

Debt crisis: live – The Telegraph

EZ crisis Live blog – The World / FT

EURO CRISIS

Do Eurozone leaders finally ‘get it’? Not quite yet – Charles Wyplosz / voxeu.org

This week’s announcements by German Chancellor Angela Merkel and ECB President Mario Draghi that the Eurozone is taking steps towards a closer fiscal union seem to be calming markets and restoring confidence in the decision-making of Eurozone leaders. This column argues, however, that the devil is still in the detail.

Best of the Week

Here are the top picks from this week's posts.  

- MoreLiver

EURO CRISIS

Goldman: "As The Endgame Approaches, The Rally In AAA-Euro Area Sovereign Bonds No Longer Seems Sustainable" – ZH
In a ‘break-up’ scenario, the creditor ‘core’ countries will be confronted with a wave of insolvencies, which would also worsen their fiscal position. And in the middle ground between these two outcomes, where we currently stand, the ECB will be intermediating growing intra-Eurosystem imbalances. Through this monetary channel at the heart of EMU, the ‘shadow’ credit risk of the core countries is already rising, and at an increasingly rapid pace.