Content-wise,
this is among my best posts. I live for moments like these. This is what makes this
the ultimate chess, combat sport or poker game. For more see today’s earlier EU Open: Conservation is just
conversation and US Open: Expected expectations. Keep the gammas long.
Joke of the Day: Spain has reached it budget deficit target of 3.5% of GDP. The problem is, Spain did it in 5 months, not 12 – Mish’s
News – Between The Hedges
Markets – Between
The Hedges
Recap – Global
Macro Trading
The Closer
– alphaville
/ FT
Market
Commentary – A
View From My Screens
Tyler’s European Summary – ZH
Peripheral
Sovereign Yields Spike On Spain 'Junk' Rumors
Equities
Rise On Low Volume Tide As Broad Risk Assets Tread Water
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS
Divergence in the Euro-Zone: Famous, Obscure
and Predictable Facts
– Place
du Luxembourg
As it stands, the Euro-Zone temporarily
benefits the core at the detriment of the periphery. However, as the dominos
fall one after another our interdependeces should come home to bite the hubris
of Germany and the chauvinism of the French that are threatening European peace
and prosperity.
Groupthink on Carry, Subordination, and
Secondary Market Yields – TF
Market Advisors
If Buffett wouldn’t do it, why should the
governments. That should be the motto, and I’m not even a fan of Buffett, but
he did extract good value for himself, with lots of protections, when he
stepped in. The same thought process needs to go on now in Europe.
EURO CRISIS: BANKING UNION
Banking Disunion – Project
Syndicate
The naive belief that integrated European
regulation and supervision would follow financial integration has proven to be
false. There are now only two options: integrate ahead of markets – that is,
give the ECB supervisory powers for systemically important and cross-border
institutions, unify prudential rules, and create an RA with money from the ESM
– or permit the current disintegration process to continue and await the euro’s
relatively quick demise.
Eurozone's banking union will not be credible;
FDIC-type fund seems out of reach – Sober
Look
With
analysis by Barclays
Cecchetti Says European Banks Need Realistic
Accounting – BB (mp3)
Rabobank’s Jane Foley Sees Further Risk for
Euro – BB (mp3)
EURO CRISIS: ECB
LTRO funds
still remain, more would only increase doomloop. SMP opposed by the ECB and Germans, and
any purchases should be done through EFSF or ESM instead.
ECB’s balance sheet expands, indicates fair
value EURUSD around 1.16 – ZH
 |
| Summit scenarios by Morgan Stanley |
The EU Summit Scenario Matrix – ZH
Morgan
Stanley’s scenarios and text
The Rube Goldberg solution – Free exchange
/ The Economist
And in the meantime, of course, euro-area
governments must remain committed enough to firefighting to prevent a chaotic
collapse of the single currency while the mechanics of further integration play
out. And progress must also occur quickly enough to ensure that sustained
crisis and deepening recession don't push citizens of member states to decide
the whole mess isn't worth it.
There is absolutely nothing that even suggests
that Europe’s leaders are even close to agreeing on something with regards to a
rational plan to address the Eurozone’s systemic problems... The only thing Europe has managed to accomplish this far
is to extend its monetary union’s survival through a series of circular
debt-piling rescue schemes.
Things To Ignore – The Daily
Capitalist
The EC’s bureaucrats are wetting their pants
over the renewed talk of a greater fiscal union between EU member states. This
is the moment they have dreamed of. Instead of being useless functionaries (as
seen by most EU citizens), they could have more importance by having control on
a supranational basis over member states. Sorry but that isn’t going to happen
soon and if it did, the member states would be making a colossal error by
giving up that much sovereignty.
EU Roadmap to Fiscal, Bank Union Runs Into
German Rebuff – BB
A solution to the euro debt crisis: Back from
the future – voxeu.org
The next meeting of the European Council takes
place on 28 and 29 June amid growing fear and uncertainty over the Eurozone’s
future. This column proposes a solution to the crisis – one that is bold and
challenging, and that cannot wait.
...would not rubber stamp conclusions for this
week's EU summit that is supposed to map out the future of the euro but would
fight for concrete measures to help growth and contain market turmoil. (Also Mish’s)
US ECONOMY
Deutsche Bank: "The Next Recession Should
Start By The End Of August" – ZH
Standard Chartered’s Semmens Sees Weak Jobs
Report – BB (mp3)
HOUSING
Housing markets: Primed again – Free
exchange / The Economist
Fist signs
that US markets are stabilizing, which would be a good thing – unless the Fed
starts to tighten too soon.
Of housing booms and busts – alphaville
/ FT
Deutsche
Bank’s very good charts. Norway looks terribly overvalued, but many
other “good” countries look extended as well.
BIS REPORT
The Worldwide QE Quagmire – Testosterone
Pit
Certain central bankers are now coming out of
the closet admitting that their favorite shenanigans—ultralow interest rates
and printing money with utter abandon—can’t solve the very problems they were
designed to solve
The twilight of the central banker – Free exchange
/ The Economist
If the world is lucky, central bankers will
discount the recommendations of the BIS, will instead engage in a bit of
self-examination, and will go back to figuring out how best to use their tools
to shepherd demand toward potential. If the world is unlucky, central bankers
will embrace the BIS' excuse-making and opt instead to place unnecessary pressure on
politicians that are already facing plenty of it.
OTHER
Systemic Banking Crises Database – The
Big Picture
Select
charts from a recent IMF paper
S&P 500 Q2 Earnings Growth Estimates Tank – Bespoke
Nice look –
materials, energy and financials look especially bad.
Views from Kynikos, Corriente, Pivot,
Eclectica, Greenlight & more
As goes the eurozone, so goes the cosmos – The
World / FT
WTO’s head announces
he is leaving, because “the difficulties we are observing in the EU mirror the
troubles of the multilateral system”
86 pages of pure unadulterated oil porn focused
on why we are not, contrary to popular belief, running out of oil.