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Tuesday, November 15

15th Nov - Damage reports


On the theme Spain is the next Italy, notice the uncertainty caused by the general elections next Sunday and the bond auction on Thursday. Good luck!  – Moreliver

News (Tue morning) – BTH
Danske Daily – Danske Bank (pdf)
Morning Briefing – BNY Mellon

FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT

EUROCRISIS
European Portfolio Strategist 10th NovCiti (scribd)
40 pages: Euro to survive, To ECB or not ECB, Political risks, Market Risks, What to do.

The Future of the Eurozone and U.S. InterestsCongressional Research Service
32 pages prepared for members and committees of congress.


European debt and banking crisis, and the existential crisis of EuroAlso Sprach Analyst
Not just a sovereign debt crisis – a banking and existential crisis for Euro. As sovereigns default, so do the banks, ECB will not backstop and sovereigns can not.

The cornered tiger of eurozone monetary policyHürriyet Daily News
All three episodes vividly display the highly political nature of monetary policies, while also underlining the national interest currents that lie beneath the smiling face of “European integration.” The lesson here is clear: Do not underestimate the Bundesbank’s creativity!

ECB set to cut rates to record lowsDanske Bank (pdf)
We adjust our ECB rate forecast by adding a 25bp rate cut in January 2012 following the already anticipated 25bp cut in December 2011. This will bring the refinancing rate down to a historically low 0.75%.

What are Greece’s problems? The state and the people running it. Post 3/3Wired And Ready
The powers obstructing reforms are many and varied: First and above all the state mafia and then the Stalinist elements. Half of the government is against privatizations it has voted in favor of. The union leaders who consider the state  as their own power base are striking every time the state tries to roll back their egregious benefits., plunging the country more in chaos.  While their strikes are always deemed illegal, they get paid and the law is never applied.

Samsung Securities: Prepare for the Italian bank runsPragmatic Capitalism

Italy’s early-retirement system is a curb on growthDB Research
Pension adjustments should, however, be accompanied by more labour market flexibility so employment will become a realistic alternative to the common practice of early retirement for more seniors. Longer, older report here (pdf).

TM@DB Research: Papademos In Greece; German SpendingThe Daily Capitalist
However, the ability to collect taxes as well as the willingness to pay taxes can hardly be improved without functioning authorities and a judicial system that is able to process more cases than new lawsuits.

CHINA
IMF Calls for Further Reforms in China’s Financial SystemIMF
Stress tests conducted jointly by the Fund and Chinese authorities of the country’s largest 17 commercial banks indicate that most of them appear to be resilient to isolated shocks, which include: a sharp deterioration in asset quality (including a correction in the real estate markets), shifts in the yield curve, and changes in the exchange rate. If several of these risks were to occur at the same time, however, the banking system could be severely impacted, the report warns.

IMF on China: bank stress test resultbeyondbrics / FT
The report was prepared at a time when the outlook for the global economy was more positive than it is today.
China’s banks may not have large direct exposure to either Greece or Italy. But the European Union is China’s biggest trade partner.  Meamwhile, back at home, house prices have started falling in the past month or so.

People’s Republic of China: Financial System Stability AssessmentIMF (pdf)

Is China's New Muni Transparency A Public-to-Private Risk Transfer Trap?ZH
For the first time since 1949, when the Communist Party took power,
China will open the regional authority debt markets (muni markets) to the public.

OTHER
OTC Derivatives Market: Update on current regulatory initiativesDB Research (pdf)
In 2009, G-20 leaders agreed that all standardised OTC derivatives should be cleared through CCPs, non-centrally cleared contracts should be subject to higher capital requirements and all OTC derivatives should be reported to trade repositories by the end of 2012.

CIS Monthly Monitor Nov 2011DB Research (pdf)

Selling the Oil Illusion, American Stylechrismartenson.com

Energy Independence – The Big LieWashington’s Blog

OECD: Leading Indicators Point To SlowdownThe Daily Capitalist

Who Are The Real 1%?Forbes