Deutsche Bank: If Merkel Doesn't Budge, 'Our Investment Advice Is To Dig A Hole In The Ground And Hide' 

 

 

Bifurcated Euro Begins As AAA-Only 'Elite'-Bond Issuance Considered

As the hopes of an IMF bazooka fades, Market News is reporting that the ever-ready-to-print-a-story European newspaper Die Welt says Germany and the other 5 AAA-rated nations of Europe are discussing jointly issuing 'Elite' bonds. We assume the borrowings could be used to fund the less-well-rated nations and avoid a true Euro-bond joint-and-several issuance which Merkel and other have been so opposed to. For now, it is clear that the 'Have's and the 'Have-Not's are becoming increasingly divided and this - much like our earlier discussion of the recap section of the EFSF draft - seems to be further from a fiscally united Europe and any inevitable endgame. We wonder what will happen when Austria gets downgraded? It certainly seems that the much-ridiculed ratings agencies are now playing an even more important role?
It is increasingly clear that Europe is bifurcating in many ways - High-grade and everyone else - and it appears the preparation is beginning. Is Germany becoming the mercantilist vendor-financier to its hugely imbalanced European trade partners?

 

 

IMF Package Denial Sends ES And EURUSD Tumbling

UPDATE: Some comments from China not helping sentiment
*MOFCOM'S CHEN: EU RESCUE FUNDING STILL FACES SHORTFALL :MOCZ CH
*MOFCOM'S CHEN: CHINA OBSERVING QUIETLY EURO SITUATION  :MOCZ CH
*MOFCOM'S CHEN: WORLD ECONOMY FACES DOWNWARD PRESSURE ON EU DEBT
Well they bought the rumor and now comes the sell-the-news/rumor/denial part of the evening as Dow Jones cites an official that 'No Discussion Within G-7 Of Reported Large Package For Italy".

A Look At The Key European Auctions, Pardon Global Events, In The Coming Week

The week ahead brings key cyclical data in the form of the global PMIs and the all-important non-farm payrolls report for the US. For China's official PMI we are looking for a flat reading, while consensus is looking for slight moderation below the 50 threshold. Our forecasts for both the ISM and non-farm payrolls are below consensus, though – given the volatility of both numbers – not significantly so. The week brings central bank meetings in Hungary, Israel, the Philippines, and Thailand. In terms of FX, with European bank funding stress continuing to become more acute – EUR/$ 3-month cross-currency basis has now moved out to 146 bps (Figure 3) – heavy bond issuance by the likes of Belgium, Italy, Spain, and France this week, and Euro zone growth weakening sharply, we think CE-3 FX will remain under pressure. We maintain our tactical recommendation to be long RUB/HUF with a target of 8.00. Our Sunday trade idea for the upcoming week is to be long EUR/CZK. Although CZK has less exposure to rollover risk than its CE-3 neighbors (see here), it has a large export exposure to Western Europe and has sold off relatively less than its peers.

EFSF "Guidelines"

Buy the rumor, sell the news? Investors bought the rumor, then sold the lack of news, I think you are supposed to sell the news again, as there is nothing in this document that provides evidence that they get it, or that any scale can ever be achieved, and if anything, it makes you wonder if they will even get to the 440 billion of support the market thought they had back in July.





Plan for a Plan Needed in Europe by 12/9

Posted by: South of Wall Street

Post date: 11/27/2011 - 21:07

It isn't going to happen 

 

 

 

 

 

Clive Maund: Gold To Profit From Economic Uncertainty 





Coming--Big Austerity Cuts




17 Quotes About The Coming Global Financial Collapse That Will Make Your Hair Stand Up








Death of a Currency as Eurogeddon Approaches




Update On US Banks And The Euro Area--Things Are Looking Grim

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