 |
| Breakeven inflation not low enough for QE |
Risk is
back, as SP bounces from a support level and EURUSD also respects the 1.20
level. Move is driven by talks of giving Greece a proper restructuring, more funds
and most importantly, giving ESM a banking license. That last one is key –
the size of the ESM is not enough to handle the crisis, and it would be a
convenient way for the ECB to do quantitative easing via proxy (it is not
allowed to perform QE directly). Germany and ECB oppose the idea, but for
how long? It is worth remembering that there was talk last night from the Fed
that further easing is right around the corner, but after a quick bounce the
downtrend continued. I am very careful as we are approaching tipping
point-levels in prices and in politics. But dropping those thoughts for now
this should be a good time to get the shorts back on.
Previously
on MoreLiver’s:
News &
Recap – RanSquawk / ZH
Frontrunning
– ZH
Overnight
Summary – BofA / ZH
The Lunch
Wrap – FT
Emerging
N.Y. headlines – FT
Today’s
front pages – presseurop
Daily press
summary – Open
Europe
El
Economista: Germany wants Spain to request €300bn bailout; Catalonia will seek a bailout
from the Spanish government
Morning
MarketBeat: Apple’s Miss Tough to Shake – WSJ
Broker Note
Briefing – WSJ
Morning
Take-Out – NYT
Short Note
On FX Market – Marc to
Market
AM Dear
Dairy: Apple Recovery – Macro
and Cheese
How Dumb is
Draghi? The Fed and AAPL too – TF
MarketAdvisors
Pre-market
Commentary – Marketwatch
Pre-Market
Trading – CNNMoney
Pre-Market
– NASDAQ
US Equity Preview – Bloomberg
Earnings
& Events – The
Street
MarketCurrents
– Seeking
Alpha
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EURO CRISIS
The euro has completely broken down as a
workable system and faces collapse with “incalculable economic losses and human
suffering” unless there is a drastic change of course, according to a group of
leading economists.
The bearish case for bunds – Buttonwood’s
/ The Economist
If the peripheral nations default, Germany will
likely suffer massive bank writedowns, an export slump (2010 exports to the
periphery were €218 billion) and a huge hit to the balance sheet of the
Bundesbank thanks to the Target 2 imbalances
End of game? Don’t bet on it – voxeu.org
Charles
Wyplosz: The EZ crisis is once again on
the march; Spain and Italy are under pressure. This column argues that policymakers are likely to
fall back once again on a failed approach to avoid admitting past errors.
Ultimately, however, EZ leaders will come around to the only way forward – the
ECB underwriting both banks and sovereigns while additional controls on bad
banking and bad fiscal governance are put in place.
EZ leaders have failed to tame the crisis. This
column presents the English language version of the new plan by the German
Council of Experts to resolve the crisis via “redemption bonds” and
accompanying institutional reforms.
Nowotny "Hilsenraths" EUR, Futures
By Reviving Doomed "Red Herring" Discussion Of ESM Banking License – ZH
Good
roundup
How A Country Rationally Exits The Eurozone – Gonzalolira
Once the political decision to exit the EMU has
been taken by a country’s leadership, this is what it has to do
Full text: Moody’s changes the EFSF’s Aaa
rating outlook to negative – Credit
Writedowns
The change in the outlook on the EFSF’s (P)Aaa
rating to negative follows the recent changes in rating outlooks announced by
Moody’s on euro area sovereigns that are EFSF guarantors
That is, if you ignore the difference in their
government bond yields and just use debt-to-GDP projections made in a working paper
from 2010
Two perspectives on the "French lion in
the grass" – Humble
Student of the Markets
My inner investor says, wow that's terrible. France is an accident
waiting to happen… My inner trader tells me that, under the current
circumstances, French real interest rates are negative and the France is actually making a
profit by running these deficits.
BizDaily: The final Greek chorus? (audio 16min) – BBC
(mp3)
Filling a bucket with no bottom: we consider
the fears of some German politicians that Greece and Spain are now unsaveable. When
do the eurozone prophecies of doom become self-fulfilling? Also: if you can't
buy it, grow it. How Greeks are going back to the land.
Press release Results of the July 2012 bank
lending survey for the euro area – ECB
OTHER
Octopus: Read This Book to Understand Wall
Street – Rolling
Stone
Octopus is an incredible dark comedy with one
of the craziest true-life ironic twists you can possibly imagine. But this
incredible plot twist is not the reason this is an important book that should
be read by everyone who wants to know how Wall Street works.
Strategic Briefing: Is The Fed Set To Roll Out
QE3? – The
Capital Spectator
IN FINNISH
Mitä euroalueella
tulisi tehdä? – Osmo
Soininvaara
Kuka saa maksaakseen
kriisin loppulaskun? – IS Pääkirjoitus
Kreikka nousi
tarkastajien Ateenan-matkan vuoksi uudestaan tikun nenään eurokriisissä, vaikka
kohtalokkaampi tapaus voi kokonsa vuoksi olla Espanja.