Daily commentary: more on the EuroTARP

Since I have been off for a few days I have a lot of links today, probably too many for one big linkfest but here they are. I will leave out more than usual to strip it down to the most salient ones. There’s a lot on Spain and India in particular. A lot of good Spanish-language links but I’ll try to address these in commentary later. I plan on doing my weekly commentary later today so I’ll have a lot more to say then.

But as I indicated two week ago, I think the EU has almost reached an untenable situation again and I expect something big. It’s not going to be eurobonds or anything like that. It could be something from the ECB but I don’t think the ECB has another good dodge left, frankly. The third link from Ambrose Evans-Pritchard gets into why. The only viable dodge being discussed is the EuroTARP, where the ESM/EFSF is available to banks as well as sovereigns.

Giving banks capital to support their balance sheets is how Europe is now dealing with the Greek situation so I think this will be put forward on a European-wide level as well. The most urgent place for the bank fix is Spain, so it could be limited to Spanish banks at first but cosmetically a euro-zone-wide policy would work best.

Again, this is just a dodge. It is not a solution. The point is to buy more time.

That’s it. Here are the links.

Spain

Why merging Spain’s troubled banks won’t fix the country’s debt crisis | Business | guardian.co.uk

Egan-Jones Cuts Spain’s Debt Rating to B From BB- on Outlook – Bloomberg

Former Bankia executive gets €14m payoff | Business | The Guardian

BBC News – Spain’s retail sales in record fall

Spain Regional Rescue Risks Tipping Point on Yields: Euro Credit – Bloomberg

Spain may recapitalize Bankia with government debt: source | Reuters

Spain runs out of money – Telegraph Blogs

Spanish debt costs spiral, Rajoy says no outside bailout | Reuters

BBC News – Investor fears hit Spanish bonds as Bankia shares drop

Spanish property: Polaris golf resort homes crash to a third of original price | World news | The Guardian

Spain’s property market gripped by new realism as prices plunge | World news | The Guardian

India

BBC News – India’s power sector in crisis

India GDP: not looking good | beyondbrics

Satyajit Das: The Great Pretender – India’s Economic Past & Future, Part 2: “A Sea of Troubles” « naked capitalism

Satyajit Das: The Great Pretender – India’s Economic Past & Future, Part 1: “India Shining” « naked capitalism

Analysis: Indian rupee slump costly for $5.5 billion in convertible bonds | Reuters

Euro crisis

Europe’s money contracts again – Telegraph Blogs

Hedge funds take bets against core euro zone bonds | Reuters

Christine Lagarde attack on Greece backfires as she pays no tax – Telegraph

Christine Lagarde’s Greek comments provoke fury | World news | guardian.co.uk

Eurozone crisis: Ms Lagarde’s morality tale | Comment is free | The Guardian

Christine Lagarde: can the head of the IMF save the euro? | World news | The Guardian

It’s payback time: don’t expect sympathy – Lagarde to Greeks | Business | The Guardian

The End Of The Euro: A Survivor’s Guide | The Baseline Scenario

For the eurozone, the worst is yet to come – Telegraph

Fearful Germans add to Greece’s woes by staying away in droves | World news | The Observer

Frozen Europe Means ECB Must Resort to ELA for Banks – Bloomberg

China

Japanese SMEs take flight to China – FT.com

China Has No Plan for Large-Scale Stimulus, Xinhua Says – Bloomberg

2 trillion yuan may be invested in stimulus – Xinhua | English.news.cn

FT Alphaville » Is Chinese real estate nearing a tipping point?

Resilient China: How strong is China’s economy? | The Economist

Facebook

The Epicurean Dealmaker: As Long as the Right People Get Shot

Facebook’s Brilliant Disaster – NYTimes.com

Bronte Capital: Facebook and the sad case of ethical investment bankers

Other

Secret ‘Kill List’ Tests Obama’s Principles – NYTimes.com

Debt-Ceiling Deja Vu Could Sink Economy – Bloomberg

US home prices hit new lows in crunch week for economy | Business | guardian.co.uk

RIM Writedown Risked With $1 Billion Inventory: Corporate Canada – Bloomberg

oftwominds-Charles Hugh Smith: U.S.A. 2012: Is This What We’ve Become?

The Irish Economy » DeLong and Summers and Self-Financing Fiscal Expansion (very wonkish)

Bush’s Terror Overreach Becomes ’New Normal’ Under Obama – Bloomberg

Repsol Seen Cutting Dividend to Defend Rating After YPF: Energy – Bloomberg

First Lady Jacqueline Kennedy’s trip to India, 1962 | Retronaut

International – James Fallows – Krugman, Fingleton, and Japan – The Atlantic

Sorkin’s Glass-Steagall straw man : CJR

Why Conservatives Keep Beefing with the Military – democracyarsenal.org

Why David Rosenberg is keen on Canada’s big banks – The Globe and Mail

Undervalued Leaders From Jeremy Grantham To Buy – Will You Let Them Pass By? – Seeking Alpha

Rand Paul Wants to Bring European Medicine to the United States — Marginal Revolution

Brad DeLong: Mitt Romney Believes in Expansionary Fiscal Policy

Appetite for Junk Bonds Shrinking Fast – MarketBeat – WSJ

Dow Pacing Losing Streak That Dates Back to 1903 – MarketBeat – WSJ

Consumer Sentiment in U.S. Climbs to Highest Since 2007 – Bloomberg

Argentina April industrial output off 0.5% on year – MarketWatch

Analysis – Argentina faces deficit for first time in years | Reuters

EU files WTO suit over Argentina’s import restrictions | Reuters

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