Notre chère Christine Lagourde


Alors que les indices se remettent a plonger, je vous libre un extrait de l'excellent Peter Tchir (une de mes sources favorites) :


Le passage concernant notre chère Lagourde est  particulièrement savoureux.


"Once again European debt problems are hitting the headlines and putting pressure on stocks globally.  While we were busy basking in the glow of the now annual Jackson Hole rally, the situation in Europe actually got worse.  The bickering and finger pointing seems constant now.  A few key things are worth watching:
Bilateral collateral agreements:  Finland's side agreement is a big deal.  Greece will not provide collateral to all the lenders, particularly the big lenders, but other countries cannot lend on terms less favorable than Finland.
Italian Austerity:  The Italians seem to be retracting austerity measures at a record pace.  Unlike Greece, which just failed to live up to the measures, the Italians have the confidence to actually vote them back down.  Italy remains my dark horse in the race to leave the Euro.
Lagarde Speaks:  Someone clearly forgot to tell Ms. Lagarde that the IMF is a joke of an entity and is supposed to do as it is told and not make more problems in Western Europe.  Even if all she is doing is telling the truth.
Economic Data Weakens:  Economic data out of Europe continues to be disappointing.  Yesterday's Manufacturing PMI was 49 which was the second month in a row below 50 and continued the downtrend.  Without a booming economy in Germany, their willingness and ability to support the rest of Europe decreases rapidly.
ECB Bond Purchases:  In the first week, the ECB was able to use a shockingly small amount of capital to bring Spanish and Italian bond yields down.  In the second week, the ECB had to spend a similar amount of money and they could barely keep the 10 year yields below 5%.  Now, here we are in the 4th week and the bonds are drifting lower.  Italian 10 year rates are back to 5.22% and the Spanish 10 year yield is 5.07%.  The move tighter always seemed suspect because there was so little actually money used.  The market had just decided not to fight the ECB.  Now they might.  The ECB has spent a decent amount of money already, is sitting on inventory that is now possibly already under water, and has a leader near the end of his term.  Watch this move closely, but it wouldn't be surprising to see the market take another run at these artificially low yields now that the ECB seems to have lost some control on the situation.
The mythical Eurobond:  Lots of people seem to hope that this can be implemented.  Some even talk about it in very vague terms, but no discussion about how it could actually be implemented ever ends with anything but some head shaking and the realization that this will take years to done, and that is if everyone really wanted to do it.  The Eurobond will not be done before this crisis resolves itself, and that resolution is looking more and more like big debt write-offs for banks.
In the meantime, as we wait for NFP, SOVX is back above 300, MAIN is above 160, and IG and HY are both well off their tights and are trading as though a lot of bears got long for a trade jumping on the momentum from last week and the month-end and long weekend technicals.
BAC CDS is back to 330 this morning, from a tight of 265 yesterday, but that is moving for its own separate list of problems.  The stock is back to trading 7.65, right around the price it closed at after the Buffett deal.  The main good thing I see about that deal is that deal is that the treasury department has a good benchmark of what they should demand if they start discussing TARP II."

Via Zero Hedge