 |
| Euro Princess, source |
I previously posted ECB to QE or not to QE?, an euro crisis-special on the possibility of quantitative easing by the European Central Bank. Later I plan to post some pickings from the recent financial research and a Best of the week-list. Remember to follow MoreLiver's Daily on Twitter, Facebook or email me.
– MoreLiver
Quote of the Weekend: The pope can drink wine but not meet girls while the sultan has a harem but cannot touch booze. The Europe’s princess has the best wines and nothing to do, but she is constantly under the watchful eye and can only sniff the cork a bit. – Mr. Jiri Salin
Reposting on websites is authorized by prominently displaying the following sentence, including the hyperlink to this page, at the beginning or end of the post. "”Weekender” is republished with permission of MoreLiver’s Daily."
Past
News (Fri evening) – BTH
Recap 18-Nov – Global Macro Trading
Recap 18-Nov – Global Macro Trading
Today in Euromess 18-Nov – Wonkblog / WP
Week in review – DealBook / NYT
Weekly scoreboard – BTH
US Macro: Summary for week – Calculated Risk
Politics this week – The Economist
Business this week – The Economist
Succinct summation of week’s events – The Big Picture
Future
US Macro: Schedule for the week – Calculated Risk
This week in EU – euobserver.com
Weighing the week ahead – A Dash of Insight
Next week’s tape – MarketBeat / WSJ
Weekly Focus: Cracks in the core – Danske Bank (pdf)
EMEA Weekly – Danske Bank (pdf)
Emerging Markets Briefer – Danske Bank (pdf)
Credit: Weekly Update – Danske Bank (pdf)
Calendars
Economic Calendar – fxstreet.com
Monthly Economic Calendar – fxstreet.com
Economic Calendar – BB
EU calendar – europa.eu
EM Week ahead – beyondbrics / FT
Standard
FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
The great de-leveraging – alphaville / FT
After Zero Hedge, now FT takes a look at Citi’s “Payback Time: The Coming Decade of Deleveraging”. Check both.
Europe may need to pull a Chapter 11 – a US-style bankruptcy, which would permit a market shutdown and Euro Zone reorganization before reopening for business.
Angela's choice – Humble Student of the Markets
To soothe German attitudes, Merkel had to manufacture a crisis: The brinkmanship and all the hawkish statements coming out from Germany that we see today may be just for public consumption. This is all theatre to show that we are indeed headed for a crisis, so they have to take extraordinary measures to save Europe.
Eurozone Debt Crisis Visualized – KPI Library
So what is really going on in the Eurozone? We decided to consolidate all the data from Eurostat, OECD, IMF, Worldbank and some other data resources and visualized all the key data. All numbers are in Euro’s.
Eurozone debt web: Who owes what to whom? – BBC
The gross external, or foreign, debt of some of the main players in the eurozone as well as other big world economies. The arrows show how much money is owed by each country to banks in other nations. The arrows point from the debtor to the creditor and are proportional to the money owed as of the end of June 2011.
We'd better get used to living with the euro crisis. It's the new normal – The Telegraph
Markets bet on two scenarios: crisis solved around Spring, or euro implodes and a great recession follows. But there is a third: current stalemate persists throughout the year and deep into 2013.
Can the Euro make Christmas? – Capitalists@Work
The worst issue is that the failure to grasp the nettle and move to a two speed euro or a managed set of defaults is going to make the end of the crisis even worse. Yesterday a senior Fund Manager at a major US institution remarked to me: 'It's all over and this is going to make 2008 look like a picnic.'
A senior official from a country that is in trouble with the markets: “For us Europe was a dream, but now it is a nightmare” – and concluding that the only option was for his country was to leave the euro. I asked him whether this was official policy. He said – no, but he personally could not see any other way out.
Markets gyrating around Eurozone officials' comments and rhetoric – tradingfloor.com
Just as the hot political potato of too big to fail banks was a core debate at the height of the credit crunch, we are effectively at that point in the Eurozone, where Italy and Spain are too big for a bailout (let alone both) – at least not without a ‘nuclear’ approach from the ECB which would undoubtedly drag France and even Germany into the realm of sub AAA.
Instead Of Relenting To Demands To Let ECB Print, Germany Is Preparing To Kick Countries Out Of Eurozone – ZH
In other words, while everyone believes Germany has been boxed into a corner and has no choice but to relent on global demands to let the ECB do whatever France demands, Germany was making other plans all along. Such as having the opion to kick France out of the Eurozone if and when it so chooses.
In other words, while everyone believes Germany has been boxed into a corner and has no choice but to relent on global demands to let the ECB do whatever France demands, Germany was making other plans all along. Such as having the opion to kick France out of the Eurozone if and when it so chooses.
The euro crisis: The German problem – The Economist
To save the single currency, Angela Merkel must take on her own country’s economic establishment
The European Central Bank: Brink think – The Economist
The Bundesbank’s chief and the ECB’s Italian president have much in common
Voters versus creditors – Buttonwood / The Economist
Market discipline works when other controls fail
Step by step to disaster – Charlemagne / The Economist
The German chancellor’s actions fall short of her rhetoric about political union
PIIGS
Greek Haircut Plan May Come Unraveled: Goldman Sachs – MarketBeat / WSJ
Strictly speaking, it is not the debt stock itself that matters for debt sustainability. It is the debt servicing cost that it implies, i.e. the implied interest bill in the budget. For example, cutting debt by 50% and raising coupons by 100% leaves the interest bill unaffected.
Looking at the eurozone through a NIIP prism – alphaville / FT
Goldman Sachs: Italy—despite its current market difficulties—(and Ireland) should be relatively better positioned to rebalance its economy, owing to the stronger Italian starting position as regards its consolidated national balance sheet, the NIIP…Despite its still relatively low public-sector debt, its NIIP suggests Spain will have a tougher adjustment period ahead. Portugal and Greece face the hardest challenges in the future.
Goldman Sachs: Italy—despite its current market difficulties—(and Ireland) should be relatively better positioned to rebalance its economy, owing to the stronger Italian starting position as regards its consolidated national balance sheet, the NIIP…Despite its still relatively low public-sector debt, its NIIP suggests Spain will have a tougher adjustment period ahead. Portugal and Greece face the hardest challenges in the future.
Is 16-Times-The-Charm For ECB BTP Interventions? – ZH
Intraday chart of the Italian government bond yield shows the very short-term effect of ECB’s bond purchases, and what happens on days when the central bank is not in the markets.
Intraday chart of the Italian government bond yield shows the very short-term effect of ECB’s bond purchases, and what happens on days when the central bank is not in the markets.
EZ BANKS
EU Banks Face $270 Billion Goodwill Hangover – BB
Banks may have to write down some of the goodwill from their purchases in the run-up to the financial crisis before they can sell assets, or new stock, to bolster capital.
UniCredit Bombshell Shouldn’t Be the Last One – View / BB
Jonathan Weil: On average the shares of the 32 companies in the Euro Stoxx Banks Index trade for about 44 percent of book value, or common shareholder equity, according to data compiled by Bloomberg. Put another way, a typical large euro-area bank would have us believe its net assets are worth more than twice what the stock market says the bank is worth. The problem is the companies’ numbers can’t be trusted, and it’s been this way for years.
OTHER
The Ebb & Flow Of Style Analysis – The Capital Spectator
The key message is that rhetorically labeling portfolios "growth" or "value" is one thing, but quantitative analysis may beg to differ. None of this would matter if there wasn't much difference in ex ante risk and return among styles. The truth, of course, is more complicated.
Sometimes miracles do happen at such meetings, sometimes the homework does at least get completed, and sometimes both things fail to be achieved. Cannes will probably go down in history as a summit that sought to achieve a growth turnaround – but failed – and where there was no trace of a miracle.
In Search of Growth (15-Nov) – DB Research (pdf)
The lion’s share of growth promotion will presumably fall to national structural reforms. Requirements differ.
Equity Theme: What do sector correlations mean in volatile times? – tradingfloor.com
Review of intersector correlations – they are high, but: All is not lost, as long-term investors will benefit from holding on as markets will at some point normalise, correlations should decrease and diversification benefits should re-appear, thereby reducing the volatility of investors’ portfolios
The macrofinancial implications of alternative configurations for access to central counterparties in OTC derivatives markets: new CGFS report – BIS
Various alternative access arrangements are under consideration for the central clearing of OTC derivatives trades. Several jurisdictions are exploring the establishment of domestic central counterparties (CCPs) and the possible benefits of establishing links between them.
Various alternative access arrangements are under consideration for the central clearing of OTC derivatives trades. Several jurisdictions are exploring the establishment of domestic central counterparties (CCPs) and the possible benefits of establishing links between them.
Policies for Increasing Economic Growth and Employment in 2012 and 2013 – CBO (pdf)
Congressional Budget Office’s statement to the U.S. Senate Committee on the Budget
The macrofinancial implications of alternative configurations for access to central counterparties in OTC derivatives markets – BIS
The G-20 leaders' commitment that all standardised over-the-counter (OTC) derivatives will be centrally cleared by the end of 2012 is intended to increase the safety and resilience of the global financial system. Achieving these objectives depends importantly on the arrangements through which market participants obtain access to central clearing.
Sorting Countries by Dividend Yield – World Beta
Interesting studies: the current yield and the future realized return are strongly correlated.
Oversimplification and financial crime – Bronte Capital
Three simple (?) recent crimes: Congressional insider dealing, MF Global, Olympus
Are economists good scientists? – The Physics of Finance
Ole Rogeberg and Hans Melberg surveyed economists to see how much they looked to actual empirical tests of a theory's predictions in judging the value of a theory. The answer, it turns out, is -- not much. Internal consistency seems to be more important than empirical test.
Debunking Economics: An Interview with Steve Keen – Part II – naked capitalism
A Leverage-based Model of Speculative Bubbles – Chicago Fed (pdf)
Risk-shifting models can give rise to both overvaluation and boom-bust patterns, and discusses the conditions under which booms and speculative trading can emerge.
BOOK REVIEWS
Fabozzi and Markowitz, eds., Equity Valuation and Portfolio Management – Reading the Markets
Best economics books of the year – Marginal Revolution
Book Bits For Saturday – The Capital Spectator
FiveBooks: Daniel Hamermesh on Economics is Fun – The Browser
SCIENCE
Google and Microsoft Talk Artificial Intelligence – technology review
Quantum theorem shakes foundations – Nature
The wavefunction is a real physical object after all, say researchers.
2nd test affirms faster-than-light particles – WP
Neutrinos: Still faster than light – Babbage / The Economist
LHC May Have Found Crack in Modern Physics – Wired
DIVERSION
The Godfather Wars (Mar 2009) – Vanity Fair
After violent disputes over the casting of Marlon Brando and Al Pacino, they tangled with the real-life Mob, which didn’t want the movie made at all. The author recalls how the clash of Hollywood sharks, Mafia kingpins, and cinematic geniuses shaped a Hollywood masterpiece.
The Pew Budget Challenge – PEW Charitable Trusts
Balance the budget.
Choosing to Die: Sir Terry Pratchett Comes to Terms with His Death – brain pickings
The Ten Clients from Hell (And How to Cope) – Registered Rep
Things I Learned from Playing Games – The Draconian
After the weak market discussion there is an ok piece on game playing and the parallels to successful investing & trading.
The Nexus Between Trading Systems And Ron Jeremy – bclund
The End of Cheap Coffee: Why the Diner Staple Is About to Become a Luxury – Good