Daily Collateral's blog
Citi's Buiter: Greece will be forced out of the euro regardless of who wins the Sunday elections
Submitted by Daily Collateral on 06/16/2012 09:37 -0500Greece is on its way to becoming a "new, critical fragile state," and the ECB and EU will have to keep it on life support for years after it exits the common currency.
Morgan Stanley, coming to the funnies section of a newspaper near you
Submitted by Daily Collateral on 06/10/2012 09:13 -0500Morgan Stanley's *hilarious* comic strip on our *hilarious* credit markets.
SocGen: US is "daring the rest of the world to sell the dollar"
Submitted by Daily Collateral on 06/09/2012 05:56 -0500Société Générale head of foreign exchange research Kit Juckes on the US dollar dynamic, QE 3, 4, and 5, "even lower rates for even longer than you thought," and the Bank of Japan slowly learning to match policies with the Fed.
On war in Europe
Submitted by Daily Collateral on 04/23/2012 18:02 -0500"Even on the eve of war, however, there was still considerable optimism that the peace would hold. Europe had experienced several decades without a major war, and in the meantime, industrialization and relatively free international trade had produced rapidly rising standards of living. A war that would destroy the fruits of this progress seemed irrational.
SocGen: Tuesday's FOMC was "as good as it gets" for QE3 hopefuls
Submitted by Daily Collateral on 03/13/2012 19:46 -0500"Rationalising away the imminent risk of inflation, the Fed leaves the door wide open for a QE3 announcement in April."
Kit Juckes: The USA's gentlemen's agreement with Japan and China is coming to an end
Submitted by Daily Collateral on 03/09/2012 12:12 -0500Looks like it's time to start looking for somewhere else to peddle those Treasuries -- but then, when hasn't it been?
Morgan Stanley: Still "lots to solve" in the euro-sovereign bank nexus
Submitted by Daily Collateral on 03/08/2012 18:58 -0500Exquisite.
Albert Edwards: JPY devaluation exacerbates risk of China hard landing, drags them into currency war
Submitted by Daily Collateral on 03/08/2012 05:49 -0500"We are a hair's breadth or, more exactly, one recession away from a market panic on outright deflation -- a panic that will send the central banks into a printing frenzy that will make their balance sheet expansion so far seem like a warm-up act for the main show." Albert Edwards
A word from Barclays on LTRO subordination of senior unsecured debt in the Euro bank funding market
Submitted by Daily Collateral on 03/08/2012 04:06 -0500The European Central Bank's recent LTRO programs have effected a significant increase in the amount of encumbered assets -- those pledged as collateral in repo transactions, central bank funding operations, and covered bond issuance as lenders increasingly demand over-collateralized borrowing arrangements to protect against credit risk -- on balance sheets across the pan-European banking system.
Fed economists slam TARP (LTRO?) in a paper measuring the rescue fund's effect on risk-taking at TBTFs
Submitted by Daily Collateral on 03/06/2012 21:21 -0500Paging the eurozone: Coercing banks to lend into a recession didn't work here in 2008. It made things worse.
BIS: Clearing CDS through a CCP could cost “G14 dealers” $100B in margin requirements
Submitted by Daily Collateral on 03/06/2012 13:32 -0500The BIS published a working paper estimating the costs of moving off-balance sheet derivatives trading to central exchanges in terms of daily margin requirements could be, for a dealer like Deutsche Bank, upwards of $8B, and for JPMorgan, $5B in times of volatility. The cost to the biggest 14 swaps dealers in terms of initial margins? Over $100B.
Probability Map: Morgan Stanley's Vincent Reinhart still says 75% chance of Fed QE3 by June
Submitted by Daily Collateral on 03/05/2012 16:28 -0500Newsflash: the Fed controls the economy. It's working on financial markets. Former Fed official and Treasury put-master Vincent Reinhart, who is now the chief U.S. economist at Morgan Stanley, says the only way QE3 doesn't happen is "if the economy surges or equity investors continue to embrace risk," in which case "the Fed would cheerfully keep its plans on the shelf." The only problem is it looks like we just had the "surge" and it didn't seem to impress the Federal Reserve, and every time they try to exit a buying program, the market tanks.
Wall Street’s weekend LTRO conversation: Stealth sovereign bailouts
Submitted by Daily Collateral on 03/04/2012 22:55 -0500Analysts are questioning the "double-down effect" the ECB's LTRO exercises are creating in eurozone sovereign spreads. Citi notes a spike in the purchase of government securities since the initial take-up in December.


