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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

The correlation between soccer and political power

At least now we know what it was really about… the peripheral problem children win the soccer and Europe agrees on the most egalitarian strategy yet, introduces eurobonds, makes Germany equal to Greece. In the words of Angela Merkel’s wonderful fake presence online:

A decisive solutions: using a fund that doesn’t exist to buy debt that won’t be repaid via a mechanism that hasn’t been agreed. #leadership

And right she is. The main outcome of last night’s negotiations is that the ESM fund, which doesn’t officially come into effect until July [and that’s just the scheduled time, who knows what will happen] will be able to recapitalize troubled banks directly, without messing with the country’s deficit. Naturally, this would be contingent on austerity-ish measures. Then, there was a rumor that the ESM bond program would only be limited to Spain, which may or may not be Merkel’s way of getting back at Italy (Che? NEIN!). And of course, there was the €120bn growth pact, mostly defined by its lack of definition, purpose and strategy, which Italy is set to block until short-term measures to depress bond yields come into play. read article

According to ZeroHedge the only important outcome is that there will be no additional money committed to any fund – here’s why.

But the bottom line, the question I want answered is this: who won? No-one seems to know, opinions differ from source to source. Maybe the score will be clearer tonight.

Another guessing game we could play today is just how large JP Morgan’s London-Whale-induced trading loss is really going to be. Dealbook went all out and called for $9bn yesterday, Reuters says it will amount to $4-6bn, the FT settles on $5bn.

Blackberry producer RIM, cut 5,000 jobs and pushed the introduction of its new operating system that was meant to come out this fall. All this is just a reminder for the private equity firms out there that this is a bargain waiting to happen. Or is it? read article

Otherwise, the US economy reported 1.9% economic growth in Q1 yesterday and Obama won another round in healthcare fight, with the Supreme Court ruling that fines for lacking health insurance under the new Medicaid plan from 2014 on are indeed not unconstitutional. read article

Weekend reading

– On the economics of giving blood, read article

– Pretending that the eurocrisis is over with the Atlantic, read article

– Recessionary shopping behavior, i.e. the lipstick-effect, read article

– The case for immigration/globalization, brought to you by the Economist which seems to be surprised at either, read article

As for next week [or the rest of “summer”], I’m expecting Citigroup and Nomura to be torn to shreds in the media, joining the other investment banks (just think muppets and whales and facebook…) in their public relations misery.

Have a good one.

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2 Responses

  1. princess1960 says:

    A .Merkel with this situation she burn..(sorry)
    B Obama is Presidente USA..what you wait he don’t winn? HA….(sorry)
    eurobonds .Not agree..bad ..for EUZ
    JPMORGAN..he loss more than 10 —–13
    for weekend reading i will again ..
    so to day is go one +2 so monday =3 i am more close
    thank you.. smarter ..the first i read is yours..

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