Daily Reading – Tuesday, July 12, 2011

FT Alphaville: The Italian panic — rationalisation del giorno

We believe that the reasons investors have targeted Italy are: (a) last week’s fiscal proposals were a bit disappointing (€40bn of tightening but mostly post March 2013 elections); (b) the issue of Fininvest trying to limit paying its fine limits credibility of the government; (c) if investors are looking to hedge against the Euro sustainability, then CDS are no longer seen as worthwhile (there could be a non-CDS triggering default) and thus they short Italian bond spreads.

FT Alphaville: Doing the right thing in the eurozone

What was it Winston Churchill said about the Americans? They could always be counted on to do the right thing after they exhausted all the other options.

Could same could be said about Eurozone finance ministers, who are now considering using the European Financial Stability Facility mechanism to directly purchase government bonds — about seven months after the idea was first floated.

FT Alphaville: Is fiscal union the only answer?

It’s panic stations in the eurozone again on Tuesday.

But this time a new theme is emerging when it comes to potential resolution.

It’s fiscal union.

FT Alphaville: How quickly things change, Italy edition

Remember when investors used to think German debt was riskier than Italian debt?

Bank of America Merrill Lynch does…

FT Alphaville: Hoping history doesn’t repeat itself, US GDP edition

This chart from Dave Altig of the Atlanta Fed is disturbing …

FT Alphaville: If (when) China slows down

The US economy has hit a proverbial “soft patch” of uncertain transitoriness (TM), Europe remains mired in sovereign debt problems, Japan is still recovering from its earthquake, and the next commodities price shock always seems just round the bend. So, to be understated about it, now would be a bad time for China to grind to a halt.

The Big Picture: Gold Cycle, Perodicity and Bollinger Bands

As good a time as any to check out this gold chart…

The Big Picture: QOTD: Jean-Claude Trichet Is Keyser Söze

Is Jean-Claude Trichet really Keyser Söze?

Bloomberg: Profits Climb to 51-Year Mean as S&P 500 P/E at Crisis Level

Earnings growth in the Standard & Poor’s 500 Index is climbing back to the average rate since the 1960s as the U.S. economy recovers, even with equity valuations stuck near credit-crisis levels.

The Economist: Rooms with a view

Asia’s frothiest housing markets are calming down. Is America’s bottoming?

The Wall Street Journal: Google Makes Facebook Look Socially Awkward

Mark Zuckerberg might want to fast-track Facebook’s initial public offering.

In what appeared to be a hasty response to the launch of Google’s rival social-networking product, called Google+, Mr. Zuckerberg on Wednesday unveiled Facebook’s new video-chatting feature. He called it “super awesome.” Too bad Google made the same feature available in 2008. Indeed, Facebook suddenly looks vulnerable. This could be bad news for investors who have recently paid top dollar for stock in Facebook in private sales.

The American Dream: China Wants To Construct A 50 Square Mile Self-Sustaining City South Of Boise, Idaho

Thanks to the trillions of dollars that the Chinese have made flooding our shores with cheap products, China is now in a position of tremendous economic power.  So what is China going to do with all of that money?  One thing that they have decided to do is to buy up pieces of the United States and set up “special economic zones” inside our country from which they can continue to extend their economic domination.

BBC: Why do Americans die younger than Britons?

New life expectancy figures show Americans some way behind countries like Canada, the UK and Australia. Why?

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