Morning Reading – Monday, February 21, 2011

Al Jazzera: Live Blog – Libya

JESSE’S CAFÉ AMÉRICAIN: Silver Bankers May Be Sitting on Big Derivatives Losses and the Fed May Be Funding Them

My question is simple. What are bankers like J.P. Morgan and HSBC doing playing in such size in this market? What is the economic and productive benefit? Perhaps there is a good answer. The taxpaying public certainly deserves to know. The CFTC says they have looked into this, but the detailed results of their findings remain less than forthcoming.

JESSE’S CAFÉ AMÉRICAIN: Gold and Silver Options Expiration At the Comex This Week

As a caution, not all option expirations are created equal, in terms of the shenanigans and market moves that they precipitate.

The breakout in gold and silver came off an option expiration.

Macro Man: Once more unto the breach, dear friends, once more…

So the main question for TMM is what all this “sturm und drang” actually means. Assuming that the ECB rhetoric is reflective of their actual thinking and, more importantly, translates into action, it is TMM’s considered opinion that the Eurozone is heading for a painful accident. Allow us to look at this in a bit more detail.

FT Alphaville: A problem for Portugal, charted

From Bank of America Merrill Lynch’s Thanos Vamvakidis (a former IMF economist) — a chart to kick off a week that looks like it might be heavy on eurozone newsflow…

Business Insider: The Simple Reason A Bahraini Revolution Could Trigger A Brand New Financial Crisis

As if geopolitical instability in the Mideast weren’t inherently reason enough for investors to worry, here’s another angle to consider.

Bahrain’s banking sector is far and away the biggest (relative to GDP) of any country in the region.

Business Insider: Meredith Whitney’s Massive Gift To Jeff Gundlach

We mentioned earlier how in the Jeff Gundlach profile in Barron’s, the star bond manager was calling for a collapse in the muni bond market.

But you should bear in mind that there’s a subtlety to his outlook. He’s not predicting a wave of defaults. He’s predicting a wave of panic.

macrofudge: Intermezzo: Fun with the Big Mac Index

Deal Breaker: Hedge Fund Manager’s Decision To Take Blame For Performance Is Slightly Alarming

In a letter sent this week, hedge fund manager (and former co-head of proprietary currency trading at Goldman Sachs) Christian Siva-Jothy informed investors that he would be shutting down his firm, SemperMacro, due to poor performance (the fund is down 2.3 percent year to date, and lost 8.7 percent in 2010 and 27 percent in 2009). He also made some truly disturbing statements.

Stone Street Advisors: John Paulson’s Interview With the Financial Crisis Inquiry Commission: The Signs Were There

…Anyway, without further ado, here’s what the man behind the Greatest Trade Ever has to say about the Financial Crisis…

The Spectator Blog: How the West became so dominant

Niall Ferguson has a zippy essay in The Times today previewing his forthcoming TV series and book on why the West became so dominant over the past 600 years. He argues that there are six features of the Western system that gave it its edge…

The Slope Of Hope: Perhaps There’s Hope Now

Well, I never thought I’d see this day……….I offer the following from today’s New York Times…

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