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| From the SocGen's report |
Today two nice pieces of research papers via Zero Hedge. I'm now updating the Calendar page.
Joke of the day: Italy should not be considered a weak economy…A breakup of the euro zone is out of the question. There is no plan B… French banks do not face significant problems with funding, so there is no need for the government to re-enact emergency lending facilities used in 2008 – French central bank governor Mr. Noyer on Monday in Tokyo. He has a history for this:
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| Race to the bottom as everyone wants a haircut. |
Joke of the Day from 4-Oct: Swiss National Bank’s peg to the euro reflects optimism in the common currency – Central Bank of France’s governor Noyer speaking in Tokyo The Source / WSJ
News (Tue morning) – BTH
Recap (28-Nov) – Global Macro Trading
Danske Daily (29-Nov) – Danske Bank (pdf)
Market Preview (29-Nov) – Saxo Bank
FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
Citi: "Forget Decoupling" - Here Is How To Trade During The Sovereign Trauma – ZH
Despite Strong Corporate Balance Sheets...Don't Expect Decoupling...Trade The Phases of The Crisis Again In 2012! – Full research note on scribd
Despite Strong Corporate Balance Sheets...Don't Expect Decoupling...Trade The Phases of The Crisis Again In 2012! – Full research note on scribd
SocGen Sees $600 Billion QE3 Starting In March 2012 Sending Gold Up Between $1900 And $8500/Oz – ZH
The French bank makes the simple case that the worse things get, the stronger the response by global central banks will be. – Full “Patience: bad news will become good news”-research note on scribd
IMF’s resources currently not sufficient for a package to Italy/Spain, only likely in a worst-case scenario
Who killed the euro zone? – Free exchange / The Economist
No one disputes that Italians are responsible for the long-run potential of their economy and for their country's fiscal decisions. But the ECB alone regulates euro-zone demand. By engineering a contraction in demand to fight inflation, it likely coordinated a shift in market expectations concerning the solvency of several threshold economies.
The (Euro) answer, my friend, is showing in the bond market – Lighthouse IM
Sometimes I get the impression Germany’s insistence on austerity is in fact an attempt to escalate the crisis. The Euro-summit on December 9 will bring treaty changes that allow countries to exit the Euro. Everybody assumes this is to “punish” deficit offenders, when, in fact, it is Germany’s carefully crafted exit from the Euro-zone.
Sometimes I get the impression Germany’s insistence on austerity is in fact an attempt to escalate the crisis. The Euro-summit on December 9 will bring treaty changes that allow countries to exit the Euro. Everybody assumes this is to “punish” deficit offenders, when, in fact, it is Germany’s carefully crafted exit from the Euro-zone.
All your European bank sub debt in one handy downgrade review – alphaville / FT
The review will affect 87 banks in 15 countries in Europe with average potential downgrades of subordinated debt by two notches and junior subordinated debt and Tier 3 debt by one notch.
The IMF-ECB ‘Plan’ – Fig-Leaf upon Fig-Leaf – naked capitalism
Mosler & Pilkington: Their ‘shame’, of course, being that the ECB, the issuer of the euro, has to ultimately write the check in order to fund the peripheral countries whether they like it or not. Being the liberated fiscal nudists that we are, we fully embrace such actions, but we recognise that our brothers and sisters within the Eurocracy may need some time and, excuse the pun, cover to adjust before they can embrace their inner MMTer
The emperor has no clothes – Guido Tabellini / voxeu.org
Last week's failed German government bond auction raised alarms across Europe; some say the Eurozone only has days to avoid collapse. This column argues that unless the Eurozone and particularly the ECB changes its anti-inflationary stance, the troubles will only get worse. The Eurozone is broken, and it is time to admit it.
nice yield curve charts: With Europeans not having that much capital, could the answer to the question be ECB printing press? With Germans constantly refusing, what else could the "silk pyjama wearing bureaucrats" do?
Can the Super Marios save the euro? – The Curious Capitalist / TIME
The Marios, no matter how “Super” they may yet prove to be, can't save the euro alone. The debt crisis is a euro zone problem that demands a euro zone solution. The problem is we never seem to get one.
Markets are reeling because Europe's leaders have only offered up half-measures to resolve the crisis. Not until Brussels, Paris, and Berlin realize the fundamental flaw in their current approach -- a lack of real political and economic integration across the eurozone -- will there be an end in sight.
A Tighter Union and Stability Bonds Could Save the Euro – View / BB
The central bank is concerned that government-bond buying in large quantities would only give national politicians an escape valve to put off budgetary overhauls. Those worries should finally be erased by the one-two combo of fiscal convergence and conditional euro bonds.
The central bank is concerned that government-bond buying in large quantities would only give national politicians an escape valve to put off budgetary overhauls. Those worries should finally be erased by the one-two combo of fiscal convergence and conditional euro bonds.
Fifteen years ago, both Bulgaria and Romania went through rampant inflation linked to a financial crisis. Bucharest narrowly avoided the collapse, but Sofia was less fortunate and experienced a meltdown of the sort Greece is currently trying to prevent.
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| The MS bailout Fed wanted to keep secret. |
OTHER
Is It Finally Japan's Turn? – ZH
JP bond swaptions getting more expensive. Japan is export-dependent and has some debt sustainability issues of its own. Is the contagion catching up to them?
JP bond swaptions getting more expensive. Japan is export-dependent and has some debt sustainability issues of its own. Is the contagion catching up to them?
Time Adjust PE Strategy Plus Oversold Conditions – HistorySquared
Where the Hedge Funds Are, Illustrated – The Reformed Broker
DIVERSION
Things I Did Not Know About The CFA Exam – Dealbreaker
This is a world untroubled by rising correlations, undisclosed conflicts of interest in CDOs, 2+% S&P moves every day, algo trading, thirteen-trillion-dollar secret Fed bailouts. It’s sort of a 99% perspective for the 1%, success via hard work and playing by the rules rather than government favoritism or winning the tournament for global stardom.
The Quiz Daniel Kahneman Wants You to Fail – Vanity Fair
Daniel Kahneman Answers Your Questions – Freakonomics