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Why Italy

June 11, 2012
There is a perverse logic unfolding.  Spain is the fourth of the euro zone members to require external assistance.  Cyprus is likely to be next, especially if Russia does not come to its aid as it did last year with a $2.5 bln loan.  
That leaves Italy as the last of southern debtor countries to be standing on its own in the face of the end of a…
Why Italy Why Italy Reviewed by Marc Chandler on June 11, 2012 Rating: 5
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The Implications of Spain's Deal

June 11, 2012
Investors ought not let the recovery in the global capital markets, that has been seen in response to the broad brush strokes of an aid package for Madrid, obscure the fact that the underlying quagmire just got deeper.  The favorable market response is largely technical in nature and related to extreme positioning and the out-sized moves in May.  
The Implications of Spain's Deal The Implications of Spain's Deal Reviewed by Marc Chandler on June 11, 2012 Rating: 5
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Spain's Negotiating Position: Five No's

June 09, 2012
As recently as May 28, Spanish Prime Minister Rajoy was claiming that "there will be no Spanish bank rescue".  He miscalculated.  He had hoped the ECB would come to his rescue.  Not only has the ECB not resumed its sovereign bond purchases, but it did not even throw Spain a bone by cutting rates, which surely is justified based on the t…
Spain's Negotiating Position: Five No's Spain's Negotiating Position:  Five No's Reviewed by Marc Chandler on June 09, 2012 Rating: 5
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Does the New Jersey Dollar Need to Depreciate?

June 06, 2012
Here is a provocative Great Graphicfrom Joe Weisenthal at Business Insider.  It compares New Jersey and New York GDP performance.  The under-performance of NJ since the Great Recession is noteworthy, but it appears that it began actually earlier. 
While this may be interesting in its own right, it is noteworthy that not a single pundit is callin…
Does the New Jersey Dollar Need to Depreciate? Does the New Jersey Dollar Need to Depreciate? Reviewed by Marc Chandler on June 06, 2012 Rating: 5
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Memo of Understanding and other Red Herrings

June 05, 2012
A red herring is a rhetoric ploy to divert attention from the issue at hand by introducing some irrelevant topic. The framing of the Greek election around the memorandum of understanding is such a red herring. There has been such deterioration of the economic conditions in Greece that the conditions and terms of its international assistance wi…
Memo of Understanding and other Red Herrings Memo of Understanding and other Red Herrings Reviewed by Marc Chandler on June 05, 2012 Rating: 5
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Redenomination Risk: Is the Genie Out of the Bottle?

May 31, 2012
We have argued that the German effort to make the Greek election into a referendum on the euro was misguided. Greece made its decision to join more than a decade ago. Opinion polls indicate that this is still the case: Greek people, by an overwhelming majority, want to stay in EMU.
The memorandum of understanding has…
Redenomination Risk: Is the Genie Out of the Bottle? Redenomination Risk:  Is the Genie Out of the Bottle? Reviewed by Marc Chandler on May 31, 2012 Rating: 5
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The Comity of Europe: Ten Points

May 10, 2012
With increased talk of a country leaving the euro zone, or even of the end of the whole project, it is worth sketching out our view. Here are the main points of our view of Europe.
1. EMU itself is a culmination of two trends: 1) the integration of western Europe since the 1950s and 2) efforts to keep Germany wedded to the fortunes of Europe. The…
The Comity of Europe: Ten Points The Comity of Europe: Ten Points Reviewed by Marc Chandler on May 10, 2012 Rating: 5
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Thoughts about the French Election

April 17, 2012
If the first quarter was about absorption of the ECB's LTRO, the second quarter will be about politics. This weekend's first round of the French presidential election kicks of the quarter that will include:
* Greek national elections, where polls warn that the current coalition government may not be returned, increasing the uncertainty.
*…
Thoughts about the French Election Thoughts about the French Election Reviewed by Marc Chandler on April 17, 2012 Rating: 5
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Four Trade Ideas

April 10, 2012
Short Euro: Since late Jan, the record net short euro futures position was scaled back and as of last Tuesday was at its lowest level in about 20 weeks. This was partly a function of shorts being pared and partly longs being established. As a proxy for trend followers and momentum players, we suspect that market segment is now better balanced to a…
Four Trade Ideas Four Trade Ideas Reviewed by Marc Chandler on April 10, 2012 Rating: 5
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Seven Observations about the Euro

April 04, 2012
1. As the world took a step away from the proverbial abyss with the firming of the US economy and the ECB's massive liquidity injections in Q1 the dollar suffered. The re-establishment of positions that were liquidated in Q4 and unwinding of part of the large long dollar positions amassed were key drivers. Those moves appear to have run their…
Seven Observations about the Euro Seven Observations about the Euro Reviewed by Marc Chandler on April 04, 2012 Rating: 5
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Great Graphic: Why We Can't Go Back to the Sixties Great Graphic: Why We Can't Go Back to the Sixties Reviewed by magonomics on April 03, 2012 Rating: 5
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More than A Jobs Preview

April 03, 2012
The March US jobs report will be released Friday, Good Friday, when many European countries are on holiday and the US is partially on holiday. Unlike the proverbial tree that may not make a sound, if there is no one to hear it, the data will be important even if the lack of market participation prevents much of a reaction.
Given these circumstan…
More than A Jobs Preview More than A Jobs Preview Reviewed by magonomics on April 03, 2012 Rating: 5
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Japanese Fembots?

April 03, 2012
The concept of genderizing robots is not new. The Jetsons had Rosie, a robotic maid. Star Wars had the dapper C-3PO. And of course Mike Myers gave us fembots:

This interesting article from Time discusses the release of Germinoid F, a Japanese female android. I discussed this back in 2010 in my featured article on the Japanese economy and yen An O…
Japanese Fembots? Japanese Fembots? Reviewed by magonomics on April 03, 2012 Rating: 5
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New Experiment in China: Perestroika?

March 29, 2012
The immediate focus on China is the possibility of another reduction in the required reserves. China has announced that this weekend (Saturday and Sunday) will be working days and that Mon-Wed next week are official holidays. This, coupled with the continued slide in the Chinese stock market (Shanghai Composite is off nearly 10% since March 14) an…
New Experiment in China: Perestroika? New Experiment in China:  Perestroika? Reviewed by Marc Chandler on March 29, 2012 Rating: 5
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China Politics: Reflections from a One Party State

March 27, 2012
The original text confused the alignment:  President Hu came from the Youth League and his successor will have the backing of the princelings.   It has been corrected here.

The controversy surrounding demise of Bo Xilai in China has sparked much debate about Chinese politics. There seems to be a misunderstanding about the way a one party state wo…
China Politics: Reflections from a One Party State China Politics:  Reflections from a One Party State Reviewed by Marc Chandler on March 27, 2012 Rating: 5
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Five Overlooked Euro Zone Developments

March 26, 2012
There are several developments that warn of future problems in the euro zone and these make us suspicious about the euro's ability to sustain the upside break.
First, we are surprised by the lack of commentary and focus on an important ECB decision last week. It decided to give member central banks the option of not accepting bonds as collate…
Five Overlooked Euro Zone Developments Five Overlooked Euro Zone Developments Reviewed by Marc Chandler on March 26, 2012 Rating: 5
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Speculative Positioning Update: Commitment of Traders

March 17, 2012
There were two significant shifts in net speculative positioning in the week ending March 13, according to the latest Commitment of Traders report.  The first is an acceleration of the short covering in the euro.  The second is the extension of short yen positions.  
The fact that the euro held support near $1.30 is important.  That is the bottom o…
Speculative Positioning Update: Commitment of Traders Speculative Positioning Update: Commitment of Traders Reviewed by Marc Chandler on March 17, 2012 Rating: 5
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Fragmentation of Risk-on/Risk-off Matrix

March 15, 2012
One of the most important developments in the foreign exchange market is the fragmentation of the risk-on/risk-off matrix that was a key feature since the onset of the financial crisis.  While cognizant of the non-linear nature of the capital markets and the fact that returns are not normally distributed, we continue to find use in monitoring the …
Fragmentation of Risk-on/Risk-off Matrix Fragmentation of Risk-on/Risk-off Matrix Reviewed by Marc Chandler on March 15, 2012 Rating: 5
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Great Graphic: Top Internet IPOs

March 07, 2012
I am in Asia for the next ten days to, among other things, give a speech at the Investment Management Association of Singapore's annual conference on March 14th. While I am gone my brilliant webmaster is in charge, and since she is always showing me something new with regards to life technology I thought we could post this great graphic about …
Great Graphic: Top Internet IPOs Great Graphic: Top Internet IPOs Reviewed by magonomics on March 07, 2012 Rating: 5
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Pressure in the Core: Dutch Treat

March 06, 2012
To the extent there is much investor concerns about the core of the euro area it has tended to focus on the French elections, where the Socialist challenger Hollande has been particularly provocative in his campaign rhetoric. He has called for a dramatic increase in taxes on the wealthy and insists on renegotiating the recently approved fiscal pac…
Pressure in the Core: Dutch Treat Pressure in the Core:  Dutch Treat Reviewed by Marc Chandler on March 06, 2012 Rating: 5
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