2011 September 12 | timiacono.com

No Lions, No Tigers, But Bears! Oh My!

We’re off to Yellowstone for the rest of the week where, if all goes well, we won’t see any of these terrifying creatures (we carry bear spray, but the thought of having to use it just makes my stomach tie up in knots, though, judicious use of the stuff might have saved two peoples’ lives in the park this year). Hopefully, all the bears will stay on Wall Street…

A few items hoisted from the archives will appear here in the days ahead, however, there will likely be nothing new until sometime over the weekend, after we’re back and unpacked.

Has Europe Gone MAD?

Now completely back into the swing of things after what seemed like  an unusually long absence over the summer, time that was presumably taken for a good long break from focusing on the world’s financial market woes, Ambrose Evans Pritchard at the U.K. Telegraph files this comprehensive report on why Europe is about to go up in flames.

First we learn from planted leaks that Germany is activating “Plan B”, telling banks and insurance companies to prepare for 50pc haircuts on Greek debt; then that Germany is “studying” options that include Greece’s return to the drachma.

German finance minister Wolfgang Schauble chose to do this at a moment when the global economy is already flirting with double-dip recession, bank shares are crashing, and credit strains are testing Lehman levels. The recklessness is breath-taking.

If it is a pressure tactic to force Greece to submit to EU-IMF demands of yet further austerity, it may instead bring mutual assured destruction.

Germany’s EU commissioner Günther Oettinger said Europe should send blue helmets to take control of Greek tax collection and liquidate state assets. They had better be well armed. The headlines in the Greek press have been “Unconditional Capitulation”, and “Terrorization of Greeks”, and even “Fourth Reich”.

As one prone to hyperbole, you might think that Ambrose is just doing what he does best (something that, apparently, boosts the Telegraph’s readership), but, maybe not this time.


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Another Crazy Greek Week On Tap

It looks as though it’s going to be another tumultuous week for financial markets as the inevitable Greek default grows nearer, policy makers in Germany already talking openly about it while making plans to shore up their banking system as other European leaders continue to hold out hope that, somehow, it can be avoided.

Tokyo stocks closed at their lowest level since April 2009 as last week’s free-fall for the euro looks set to continue in the days ahead. Dow futures in the U.S. are now down more than 200 points and even gold is taking a beating, down more than $20 an ounce as traders cash in their gold gains to meet margin calls elsewhere.

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Monday Morning Links

Global markets fall on debt fears – BBC
Greek default jitters hammer French banks, euro – Reuters
European Banks Now Valued at Post-Lehman Lows – Bloomberg
Tokyo stocks end at 29-month low on Greek fears – Channel News Asia
Germany and Greece flirt with mutual assured destruction – Telegraph
Greece has cash until October: deputy finance minister – Reuters
G7 pledges ’strong, coordinated’ effort on economy – CNN/Money
Stark ECB exit hits shaky euro zone at worst time – Reuters
Obama to send jobs bill to Congress on Monday – Washington Post
What caused the recession of 1937-38? – voxeu
Golden Spikes – Krugman, NY Times
The I-word – Boston Globe

Oil below $86 amid growing Europe debt crisis – AP
Gold eases as investors sell to plug other losses – Reuters
OPEC cuts oil demand forecast on growth concerns – Bloomberg
No Hiding Place From Crisis Bigger Than Lehman: Economist – CNBC
Money managers and central banks buying gold. Are you? – Commodity Online
Chinese Official: Yuan Will Be Fully Convertible by 2015 – Bloomberg
Libya looks to restart oil production, but skirmishes go on – McClatchy
What do low government bond yields signify? – EconBrowser
Market Swings Are Becoming New Standard – NY Times
The gold price’s next move – Stockhouse

August retail sales expected to slow – MarketWatch
Working-age adults make up record share of US poor – AP
Brace for a Long Recovery From Global Credit Glut – Johnson, Bloomberg
Even the Germans don’t know the answer to their euro question – Economist
Merkel allies break taboo with Greek default talk – Reuters
Eonomist: Australian property market to crash – Smart Company
The Two Year Anniversary Of “China’s Ghost Cities” – Zero Hedge
Mr. President, Fixing the housing market is Job One – Herald Tribune
More on the Government’s Mega Refinancing Plan – Bruce Krasting
Fed Policy – No Theory, No Evidence, No Transmission Mechanism – Hussman Funds
The Perfect Stimulus: Free, Politically Viable, and Deficit-Reducing – Atlantic

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