31st Jan - LTRO counterproductive?

Good luck getting a decent living when older. Source

Several interesting articles on how the LTRO is not as great as it originally was thought to be. More LTRO will just crowd out proper holders of the debt and make everyone reliant on ECB. The more the LTRO size is increased, the more strained the bank balance sheets become as all bonds will be pushed to ECB for some 1% money. 

Peter Tchir points out that the recent moves seen in Italian and Spanish bond yields are nothing spectacular, and similar relief moves were seen twice in the past 6 months. Is LTRO the solution, part of the solution, a partial but inadequate solution or part of the problem?

Surprisingly the Greek PSI negotiations are in a stand-still, and Greece suggested an extra EU summit for February on related matters. No wonder Greece is in a such a trouble - they still believe in EU summits! 

Today I've spent four hours combing through the daily articles, from 204 feed subscriptions and roughly 500 articles I present the ones below. Leave a comment, share the MoreLiver, follow me on Twitter or Facebook and email me for suggestions.

31st Jan - When even UK looks sane

I wrote about the evils of Sarkozy last night. I still wonder these selfish bureaucrats who needed the help of their class mates with their course work in their elite universities, but were very good at looking and feeling convincing and trustworthy (=your typical politician). How much are they prepared to destroy the national wealth and competitiveness just to get re-elected? I repeat my FU to Sarkozy. UK is probably the only country in Europe with somewhat sane and sober leaders. And that is a lot for a country where cabinet members are found dead in their closets with an orange in their mouth.

30th Jan - Sarkozy's Crazy FTT

Spot the odd one out. Source: Bespoke

Sarkozy is trying his best to look electable against that stinky socialist who is leading in the polls. The French little man's plan is to push through  a watered-down financial transaction tax (FTT) scheme that would make him look tough on banks. More importantly, this is something his opposition has promised to do as well, so by establishing the tax he is taking away one reason to vote his adversary. 

30th Jan - Germany pushed Greece

Kiel Institute did some calc for Der Spiegel

Weekend's main discussion topics were German demands for Greece to give up its fiscal sovereignity. This would be meaningless in the real world, where Greece has been completely reliant on foreign aid for centuries. The real signal that commentators are reading from this is that...

29th Jan - Guest: Great Expectations

A guest post by Martin from Macronomics. Oh yes, I just updated the Calendar page.

Markets update - Credit - Great Expectations

"Take nothing on its looks; take everything on evidence. There's no better rule."
Charles Dickens, Great Expectations

Another reference to Charles Dickens, following on our conversation "A Tale of Two Central Banks", given the importance of the rally year to date in the credit space. Indeed, it seems to us markets have "Great Expectations", and although Charles Dickens decided to rewrite the end of his book as the ending was deemed too sad, we think it would be preposterous for us to revise our negative stance on Europe, given the current PSI overhang reminiscent of a Damocles sword and the acceleration in the deterioration of the Portuguese situation (which warrants cautious monitoring in the coming weeks/months).

In our credit conversation we will go through the significant tightening witnessed since the implementation of the LTRO supported by the latest FOMC decision by the FED.