Archive - Sep 24, 2012 - Story

• World on track for record food prices 'within a year' due to US drought (Telegraph)
• Foxconn halts production at plant after mass brawl (BBC)
• Germany Losing Patience With Spain as EU Warns on Crisis Effort (Bloomberg)
• Fed Recovery Doubts Spur Investor Bid for Treasuries (Bloomberg)
• Japan protests as Chinese ships enter disputed waters (Reuters)
• In Shark-Infested Waters, Resolve of Two Giants Is Tested (NYT)
• China jails Wang Lijun for 15 years (FT)
• China closes in on Bo Xilai after jailing ex-police chief (Reuters)
• European Leaders Struggle to Overcome Crisis Stalemate (Bloomberg)
• Politicians 1: Austerity 0 - Portugal Gives Ground on Worker Contributions (WSJ)
• Obama Controls Most of His Money as Republicans Have More (Bloomberg)
• Coeure Says Not Clear That Further ECB Interest-Rate Cut Needed (Bloomberg)
• France Seeks Labour Overhaul (WSJ)

The last time we saw a bevy of regurgitated European rumors shortly refuted was last Friday. Today we get a redux, following a hard push by none other than Spiegel (precisely as we predicted a month ago: "And now, time for Spiegel to cite "unnamed sources" that the EFSF is going to use 3-4x leverage") to imagine a world in which the ESM can be leveraged 4x to €2 trillion. This is merely a replay of last fall when Europe's deus ex for 2 months was clutching at a cobbled up superficial plan of 3-4x EFSF leverage, which ultimately proved futile. Why? Because, just like in 2011, one would need China in on this strategy as there is simply not enough endogenous leverage in either the US or Europe which would make this plan feasible. And China, we are sad to say, has a whole lot of its own problems to worry about right about now, than bailing out the shattered dream of a failed monetary unions still held by a few lifelong European bureaucrats, which this thing is all about. As expected, moments ago Germany refuted everything. Via Reuters: "Germany's finance ministry said on Monday that talk of the euro zone's permanent bailout fund being leveraged to 2 trillion euros via private sector involvement was not realistic, adding that any discussion of precise figures was "purely abstract." This also explains why we devoted precisely zero space to this latest leverage incarnation rumor yesterday: we were merely waiting for the refutation.