Daily Reading – July 4, 2011

FT Alphaville: The French proposal, c’est un défaut sélectif, says S&P

S&P says the French proposal to collateralise a Greek rollover – so popular it’s been likened to a toxic CDO – would amount to selective default under its criteria.

FT Alphaville: Barclays and the VZZ implosion

The iPath Vix long enhanced mid-term exchange traded note (VZZ for short) was automatically redeemed due to a so-called termination event. The ETN had some $12.8m in assets as of June 30, according to IndexUniverse. It had been launched in November 2009.

FT Alphaville: Goldman’s on top of the Dodd-Frank talks

A list of financial entities most panicked about upcoming Dodd-Frank rules.

Whoops! We mean a list of financial entities who are most concerned about educating regulators.

Macro Man: U-Turn or U-bend

The plan to sell the rally on Friday looking for “normal service to be resumed” after the Month End Noise and US holiday was going just fine until those ISM figures came out. Our cheapo TMM ISM model that we knocked up using tin foil and sticky-back plastic has been crumpled up and chucked in the bin. We hate to admit it but maybe it is worth paying up for the PhDs’ versions.

The Big Picture: Happy Birthday, America, but it’s time to grow up.

The column speaks to the nation as if it were an exuberant young lad who has outgrown its youth, and needs to become a man. The tongue-in-cheek tone somewhat softens the tough love/ugly truths contained within.

The Big Picture: Is Crude Oil About to Collapse?

For many reasons, I have my doubts about an oil shock in the spring of 2012. I do not see the economy as remotely as strong as it was pre-crisis, so demand for Oil is not nearly as robust. Secondly, with the dollar down 40%+ since 2001, the big spurt in Oil prices may have already occurred. Third, a rise towards $150 is likely to slow the global economy down enough to correct prices back towards ordinary levels before we hit that mark. And last, I am less than impressed with the author’s forecasting record.

The Big Picture: Succinct Summation of Week’s Events (7/1/11)

FT BeyondBRICs: China: swing factor for oil market

China is not a member of the IEA and while the IEA has been courting closer cooperation in recent years, the world’s second-largest oil consumer’s absence increasingly calls the agency’s relevance into question, particularly when it comes to coordinating complex policy decisions like the release of reserves.

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