Waiting for the stupid, pre-arranged parliamentary debates and votes on the EFSF feels just like watching the Eurovision song contest for the music's sake. Again a new plan on the Greece. The leveraged EFSF is not fashionable anymore, and now the talk is that the next stop is the G20 meeting much, much later. It is late and duration calculations have kept me from writing. After too much caffeine I figured I might throw here some of my wilder scenarios of what might happen or go wrong in the world.
Yes, of course it involves proxy wars, hydrocarbons and the Middle East. As Pakistan seems to become a lost case, eyes are turning towards other opportunities.
The main driver is the global reliance on stability in Saudi-Arabia. Should Saudi-Arabia become radicalized, new power bases would be sorely needed. Recent war games have confirmed the essential role of Saudi Arabia and strategically, it is dangerous to be too dependent on a single player.
What might happen if the Saudis were out of the equation? Again a huge amount of links, many of them worth reading. Better ones or good but short are marked with asterisks, and towards the end of the section the links generally get worse, more off-topic or just boring. Who cares of fundamentals nowadays? I updated the UBS rogue trader and the Calendar. Feedback is always appreciated: The MoreLiver's Daily is also now on Facebook. Wednesday Watch morning — Between The Hedges.
Today's Headlines evening — Between The Hedges. Frau Merkel, it really is a euro crisis — The Telegraph. Merkel still stated this is not a crisis of euro, but of sovereign debt.
Evans-Pritchard points out that the total euro debt levels are low compared to other developed nations and finds it appalling how this late in the game the key people are completely lost — or just talking stupid. Debt Deflation in America — naked capitalism. Half of this very long interview actually discusses the European crisis policy limits, given legislation and roles of the different institutions. Tape Bombs — Macro Man. Thanks for a really depressing interview. Too many, more complicated, markets dissect and dismiss the ideas faster.
You can lever, but will you take the loss? The EFSF could be leveraged thousand-fold, but at the end it is all about cash flows and credit ratings of the underlying sovereigns.
But the size would be credible. Barroso attacks member states, US, banks — euobserver. When will the Greeks be made to suffer? Despite net private outflows, Greece maintains a current account deficit. On Greek Haircuts — Credit Writedowns.
Peter Tchir comments on the latest plan to save Greece — by selling everything.More...