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| 1 year Greek bond yield almost at 100% |
Summary: Everything much the same, Europe looking really bad, in the U.S. even the sovereign wealth fund of Norway is suing the banks over mortgages. Italy was slightly relieved after they voted on some austerity measures – who cares, they cancelled the previously agreed measures.
Short link list today, because I posted late yesterday. I also posted a collection of 9/11 articles and some Value-at-Risk intro slides. Hope you have a good Thursday.
From yesterday: "Greek Debt Swap Take-Up at 75 Percent: Private sector participation in a Greek debt swap has so far reached the 75-percent mark, far below a 90 percent target, newspaper Imerisia reported on Wednesday without naming its sources." Deadline tomorrow and Greece has previously stated that they would not go ahead without a participation rate of 90%+. As always, I post stuff and updates on Twitter.
Views: ECB meeting coming up, I'm scared they will leave the interest rate unchanged – even though a cut is the obvious thing to do. According to Trichet’s perverted logic, cutting rates or dovish signaling would be a sign of weakness and admitting that there is trouble. Admitting there is something wrong is not what the eurocrats’ PR-agency had suggested, so more denial and fancy words to be expected (like Merkel’s “Stability Union”.
It is going to be interesting to see how they handle the low participation rate in the Greek bond swap.This is not currently in the headlines and when people realize this they will probably go into the "risk off"-mode.
Quote of the Day: “As we have often heard said, credit anticipates and equity confirms - but unicorn tears and phoenix farts may yet prove credit wrong as ES closed within a tick of the magical 1200 level.” – Zero Hedge on stock market rally yesterday
News roundups:
Thursday Watch – Between The Hedges
News That Matters – The Trader
EURO CRISIS
Some sorry professors stating publicly that markets are wrong and default risk in the periphery is not that large. Academic life..
What is the risk of European sovereign debt defaults? Fiscal space, CDS spreads and market pricing of risk – voxeu.org
Another article on another way of proceeding to fiscal half-union
“Triple-knot” fiscal safety for the Eurozone – voxeu.org
Greece to sack 150,000 public sector workers ‘for the sake of our children’ – Social Europe Journal
FINANCIAL CRISIS
Referring to a recent Morgan Stanley research note
Concerted Monetary Easing As Early As This Weekend? – Also Sprach Analyst
STOCKS
Corporate Margins Squeeze? – New$ to Use
Corporate profits are in trouble – Pragmatic Capitalism
OTHER
With a link to the full weekly technical analysis letter from yesterday
New Short Signal in Place-UBS Technical Analysis – The Trader
Study finds that an increase in assets isn’t all that great after all. But it won’t kill you either. – allaboutalpha.com
Some Hedge Funds, to Stay Nimble, Reject New Investors – DealBook WSJ
“Price a bank pays for liquidity depends on its individual liquidity position as well as the distribution of liquidity across banks.” – hardly surprising stuff.
DIVERSION
Interesting article on forecasting with game theoretical tools
Modelling behaviour: Game theory in practice – The Economist
Seven minute video on the topic
JStor opens up the really old articles to public (after they are on Piratebay anyways)
Research Archive Widens Its Public Access a Bit – Techonology Review
Creativity Not as Well Received as We Think – Discovery News