Will the ESM get the banking license? Or maybe the ECB will get a license to directly monetize sovereign debt? All that the ECB has now is a licence to kill the euro zone.
Please see today's earlier posts, as the material has been of exceptional quality. The crisis is clearly at a turning point, but the direction is undecided at the moment. For better or worse, we shall see.
Previously
on MoreLiver’s:
News – Between
The Hedges
Markets – Between
The Hedges
Recap –
Global Macro Trading
The Closer
– alphaville / FT
Tyler’s US Summary – ZH
Gold
Roars, Treasury Bores, Equity Floors, US Scores
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EUROPE
Essentially, the bank runs also shift the
credit risk of peripheral banks from the local depositors to the Germans. While
the Germans kick and scream about not wanting to take on credit risk through
Eurobonds, they are already taking on similar risk through the banking system
EMU Gets Ostrichized – Krugman / NYT
Or maybe head in the sand isn’t the right metaphor — maybe it’s deer in the headlights, with policy makers paralyzed as it all goes wrong.
Or maybe head in the sand isn’t the right metaphor — maybe it’s deer in the headlights, with policy makers paralyzed as it all goes wrong.
How the euro was saved – Free
exchange / The Economist
In June, Peter Berezin of the Bank Credit
Analyst adopted the viewpoint of someone looking back on the crisis from the
year 2021, and described what today must seem like a hopelessly idyllic
outcome:
EUROPE: ESM BANKING LICENSE?
ESM Banking License? Rumors of Non-Solution
Send Sovereign Yields Lower; Purposeful Non-Elaboration – Mish’s
Note that the ECB has already rejected this
idea, so has the German central bank and numerous German politicians. Moreover,
no one really wants to discuss this issue now anyway, fearing it might impact a
German constitutional court ruling coming up in September.
Will the ESM to be granted a banking licence? – Kiron
Sarkar / The Big Picture
Generic
market summary included.
What Nowotny Did Not Say – Marc to
Market
There are good reasons not to expect the ESM to
get a banking license any time soon… Second, there are profound arguments
against granting the ESM a banking license… Thirdly, it is not clear what kind
of controls could be put into place.
Barclay’s Callow Says ESM Bank Charter `A Good
Idea’ (Audio 12 min)
– BB (mp3)
EUROPE: PIIGS
Downgrades Could Force €66 Billion in Spanish
Selling – MarketBeat
/ WSJ
The interest-rate strategy team at Morgan
Stanley has crunched the numbers, and they figure it could be as much as €66
billion. That's a lot. Spain has around €500
billion in outstanding bonds.
Credit Suisse: Greece – the return of the
drachma is becoming more likely – ZH
The probability that some form of local currency is reintroduced has increased in our view, and is now greater than 50% on a 1-year horizon. This doesn’t necessarily mean Greece imminently needs to leave the EU/euro area – the new currency and the euro could be run in parallel – although that too has become more likely in our view.
The probability that some form of local currency is reintroduced has increased in our view, and is now greater than 50% on a 1-year horizon. This doesn’t necessarily mean Greece imminently needs to leave the EU/euro area – the new currency and the euro could be run in parallel – although that too has become more likely in our view.
RBS Says To Expect A Spanish Sovereign Bailout
Request "Within Days" – ZH
USA: FED & QE
An early FOMC preview: the menu of options – alphaville
/ FT
As usual we won’t play the percentages; instead we’ll just run through the possibilities and list a few of the potential complicating factors involved with each of them.
As usual we won’t play the percentages; instead we’ll just run through the possibilities and list a few of the potential complicating factors involved with each of them.
Housing Data “Surprises” to Downside – The
Big Picture
Good
collection of long-term charts
ASIA