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Links 1-11-2011

January 11, 2011

The Traders Crucible Must Read:

FT Alphaville » The end of the taxpayer put: It appears that the Eurozone banks are under a huge amount of pressure – they may not last much longer if these spreads are any indication.  Is this the beginning of the end?  How does this end well for the banks?  There is unlikely to be a bailout, and without the bailout, the only option is nationalization and restructuring.

And I do not see this impacting the real economy much either. Note that this is Commerz, a German bank. Clearly, Germany isn’t suffering due to this bank being insolvent and just continuing to do business.  Interesting. What if there is a wave of bank nationalizations and nobody notices?

If the Eurobanks go, what does this mean for the U.S. banks?  Will the U.S. banks be able to stall or extend? I think not.  The political will for handing over bags of money has ended, and with the fed effectively nationalizing much of the former repo market by paying interest on reserves, the impact to liquidity should be muted no matter what happens to the large banks.

  1. Indonesia May Sell Dollar Bonds to Local Market to Curb Risks – Bloomberg: Just a matter of time before they default, eh?  These dollar denominated loans nearly always end in default.
  2. http://libertarianpapers.org/articles/2010/lp-2-43.pdf
  3. Job Openings in U.S. Decrease for Third Time in Four Months – Bloomberg: Oops!
  4. Financialization Economics: On Big Bank and Big Government: If you pay attention to MMT, you already know this. • (1) additional bank reserves do not enable or encourage greater bank lending;
  5. Charles Ferguson on the Financial Crisis
  6. Number of Swiss prisoners increases again in 2010. – swissinfo: around 6,000 prisoners
  7. The return of the Zeppelin: not just a flight of fancy – Telegraph: In the light: “So why aren’t the skies darkened with fleets of these behemoths? The answer is simple: money. With few investors willing to take the risk of building something new, the technology is being pushed forward – as is so often the case – by the military. “
  8. Daredevil completes jet pack loop-the-loops – Telegraph: This guy has a death wish
  9. Mish’s Global Economic Trend Analysis: Australia’s “Tulip Mania” About to Crash; 44% Jump in Property Listings Proves the Proposed Housing Shortage is Gargantuan Myth; Playable Actions: Australia’s luck just ran out.  😦
  10. ECB Drains E74.0 Bn In 1-Week Term Deposit Tender,As Intended | iMarketNews.com: The drained amount this week matched the total volume of government bonds purchased by the ECB and settled as of last Friday and matched the intended amount from last week, given that the central bank purchased only E113 million last week under the SMP, its lowest total since October.
  11. Bloggers’ word choice bares their personality traits, study finds: Wow! Sky Blue: News at 10
  12. $2.6 Billion to Cover Bad Loans: It’s a Start – Yahoo! Finance:  A 1% downpayment?
  13. Greece sells 1.95 bln eur T-bills, 26-week yield 4.90% | Reuters: Bid to Cover, baby!

(forgot to put in the new Perry Mehrling book)

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