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Thursday, February 2

2nd Feb - Can we start talking about a 'Mario Put'?

The more interesting and unique links are highlighted below. Probably nothing much will happen in the markets until the next major EU summits and any signals of the next LTRO. It is definitely being priced in now, and you might read this post for more. I would go as far as calling the LTRO the "Mario put", to paraphrase the classic "Greenspan put" to modern times. I just updated the Facebook post and will now think some derivative thoughts for future posts. No-one has original ones in practice. If you have any ideas, contact me.

To the links: 


News – BTH
Markets – BTH
Recap – GMT

Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
Tracking Europe’s Debt Crisis – NYT

EURO CRISIS: GENERAL
European Hope Versus Global Growth Risk, Goldman Quantifies AnxietyZH
Goldman Sachs has an interesting two-factor model for asset classes: ‘
Europe’ and ‘Growth’

United States of Europe? What it Will Take to Save the Continent from Economic CollapseAlterNet
I don't think the Europeans can keep this from spiraling out of control without creating the dreaded "transfer union" that so many are set against…Despite the reality of transfer unions, many Europeans are not politically ready for a United States of Europe even though the euro's existence practically mandates it.

Germany’s policy prescription re the Euro Zone is (quite rightly) being questionedThe Big Picture
To (solely) pander to their electorate, whilst ignoring the consequences (including to themselves – which is exactly what Merkel is doing) is suicidal... We all know that Portugal cannot survive with their current debt load.

Beneficial LTRO Bond Auction Effect Ending On Mixed Spanish Auction As Tails SoarZH
Long roundup of comments on the auction

EURO CRISIS: CENTRAL BANKS
Bundesbank sinks deeper into debt saving EuropeEvans-Pritchard / The Telegraph
Germany's Bundesbank has entirely exhausted its stock of private assets and run up a quarter of a trillion euros in liabilities propping up the eurozone system, testing the political limits of EMU solidarity in Germany.

Euro Banks Swap Cash for TrashTIME
Cheap loans being offered by the ECB to help reflate the Eurozone are encouraging some banks to boost their profits by loading up on risky bonds.

The ECB's tricky route to stabilizationFree exchange / The Economist
Using unconventional methods (LTRO), bond yields of countries not outside the sphere of hope came down. But bank lending did not improve.

The TARGET2 imbalances reference guideSober Look
The concern around TARGET2 imbalances is that central banks owe a great deal of money to each other via the ECB and should a nation drop out of the Eurozone, these liabilities may not be met. The ECB may then have to take a large loss. A mechanism for a nation's exit from the euro area was never developed. With a link to a very important paper for the end game.

Why The LTRO Can’t Save EuropeMarketBeat / WSJ
BCA: The ECB’s LTROs can solve the banks’ refinancing needs for the next few years if they choose to take advantage. Yet the LTROs’ effect on peripheral sovereign debt is only indirect and is subject to the banks’ fickle appetite for risk.

OTHER
Here’s The Market’s Latest Worry: MarginsMarketBeat / WSJ
Profit margins declining and from historically high levels. As margins are mean reverting, this could be bad news for bulls.

Unprecedented Global Monetary Policy As World Trade Volume CratersZH
Goldman Sachs: central bank policies are more synchronized than never before. Emerging countries have room to ease, but developed countries less, so they will resort to liquidity support and other unconventionals.

OECD Statistics Explorer and Some Other Cool S**tChart Porn
It has interactive choropleth maps, motion scatter plots, profile plots, time graphs, and cool histogram tools – and all of them have excellent filters and fine tuning controls, can be viewed over time, are smoothly animated and you’re allowed to load your own data. But wait! There’s more! MUCH more!

Danish pension fund makes record 26% returnFinancial News
Was 2011's Most Successful Hedge Fund Actually a Pension?AI-CIO

Financial Blogosphere Must-ReadsAdvisorOne
Perhaps you find a new blog to follow from these? But do not stray too far from MoreLiver's!

Too Much Consulting?Overcoming Bias
Consultants saying something that could be had for cheaper, but having enough prestige to help push the issue inside the customer company.