14th Mar - Goldman and bond reversal

Spain & Italy, 400bn TARGET debt

Very interesting day. We probably saw an important reversal in bond markets, which I duly noted already last night. Are the bond bulls dead? Probably, as the alternative is Japanification. Meanwhile, The “Goldman Letter” is widely commented by everyone, and this will probably change the way how customers do business with investment banks – and how the investment banks conduct their business. See – it was not about the housing crisis, the crimes, the lying, the billion-dollar fines. All it took was one confession of moral wrong, and everyone is all over the banks. After the PR disaster is over, Goldman and few other banks will look a lot different.

Add up both public and private debt, and...

News – Between The Hedges

Markets – Between The Hedges

Recap – Global Macro Trading

The Closer – alphaville / FT

TV: Bloomberg, CNBC, BBC

Debt crisis: live – The Telegraph

Europe Crisis Tracker – WSJ

Tracking Europe’s Debt Crisis – NYT

EURO CRISIS

Greece take II - it's official – Open Europe

Reuters has just released the latest EU/IMF/ECB troika report – the first to fully account for the bond swap and its impact on Greek debt.

Systemic Risk, Multiple Equilibria and Market Dynamics – What You Need to Know and Why – PIMCO
In the current environment, the prevalence of some subjective bimodal expectation distributions (e.g. Europe related) speaks to the multiple equilibrium features of sovereign debt markets. Multiple equilibria give rise to a range of scenarios, each quite different and each with its own distribution of returns, risks, correlations, and market functioning.

Another good paper (and some comments) on TARGET2 imbalances – Sober Look

Dear Germans: Bring Out Ze Checkbooks – ZH
The TARGET2 balances, Itali

Emergency Liquidity Assistance in the Euro Area – Morgan Stanley (pdf)

Report from Nov 2010, h/t Alea

GOLDMAN SACHS LETTER

On leaving Goldman Sachs – Pragmatic Capitalism

The Sad State of Goldman, Merrill, et. al. – EconoMonitor

The Volcker Rule and the Goldman Controversy – DealBook / NYT

Model this (the Goldman guy) – Marginal Revolution

Is Greg Smith 'Toast' After Exposing Goldman? – Pension Pulse

Goldman Sachs Related Humor – The Big Picture

Goldman Sachs Banker Quits ‘Toxic’ Firm: Will Clients Flee Next? – TIME

“Our Response to Today’s New York Times Op-Ed” – alphaville / FT

FYI, Whitney Tilson’s Investment Thesis On Goldman Sachs Has Not Changed In Light Of Times Op-Ed – Dealbreaker

The ballad of Greg Smith – Felix Salmon / Reuters

http://blogs.reuters.com/felix-salmon/2012/03/14/the-ballad-of-greg-smith/

Resignation Letter Reveals Goldman Sachs Is In The Business Of Making Money, Hires People Who Don’t Know How To Tie Their Shoes – Dealbreaker

100 YEAR BONDS

No forever debt please, we’re British – alphaville / FT

A hundred years of solvency? – Buttonwood’s / The Economist

OIL

What Closing The Straits Of Hormuz Will Mean In 3 Simple Charts – ZH

BNP Paribas looks at previous global oil supply shocks

Rapid increases in US oil production – Sober Look

BONDS

A turn in the cycle? – Buttonwood’s / The Economist

Are we witnessing one of those historic turning points in markets, on a par with March 2000 (when the dotcom bubble burst) or March 2009 (the post-Lehman low)?

Treasuries Hammered as "Operation Twist" Unwinds; Another Triumph of the 1% Over the 99% - Mish’s

FOREX

The dollar - equities correlation reversal – Sober Look

Euro Becoming New Dollar – The Source / WSJ

CHINA

Beijing beating Brussels at its own game? – Open Europe

All Feasts Must Come to an End: China’s Debt and Investment Fueled Growth Part 2 – EconoMonitor

PODCASTS

Daiwa’s Moran Sees Gradual Improvement in Economy – BB (mp3)

Goldman’s Hatzius Says Commodities Are Place to Invest – BB (mp3)

Shepherdson Says Fed to Raise Interest Rate in 2013 – BB (mp3)

OTHER

The Villain – The Atlantic

The left hates him. The right hates him even more. But Ben Bernanke saved the economy—and has navigated masterfully through the most trying of times.