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Frontrunning: March 10

Regulators tell US banks to hold money ( FT ) Even as Italy is expected to go bust next , Italy's Romano Prodi Says " Greek Crisis Is Over, Rest of Region Safe" ( Bloomberg ) Race to the bottom with G4 currency rhetoric ( Reuters ) Finance: an exposed position ( FT ) Todd Harrison: The witch hunt widens on Wall Street ( MarketWatch ) Simon Johnson reviews Hank Paulson's memoir ( The New Republic ) O'Krugman's Keynesian blarney ( IBD ) Buyout firms can't spend $503 billion as fund deadlines loom ( Bloomberg ) China's exports, property prices add pressure to pare stimulus ( Bloomberg ) GDP growth expected to slow down, keep rates low ( Reuters ) Dubai made "some progress" in debt talk, U.K.

Columbia Prof Who Called Argentina Crisis: "Corruption Is The Reason Italy Will Be Next"

Columbia's Charles Calomiris, who predicted the Argentina sovereign debt crisis (not sure which one: do people actually keep count?) was on Bloomberg TV spreading some more logic, first as pertains to those satanic monsters better known as CDS traders with the following piece of brilliance - "the CDS market always requires two parties in any transaction ." This is something that everyone tends to forget. Unlike stocks or cash bonds, where the whole concept of Zero Sum is somewhat murky (especially in naked shorting) in derivatives it is precisely that - one man's loss is another man's gain - no exceptions. Why is nobody scapegoating those traders who enable the speculators to exist

Wall Street Has Become Underwrita Non Grata In Europe

First China comes through on its threat of disposing US securities, now Europe is rapidly isolating Wall Street from participating in European sovereign bond offerings. The Guardian reports that "for the first time in five years, no big US investment bank appears among the top nine sovereign bond bookrunners in Europe, according to Dealogic data compiled for the Guardian." Curiously, just the one bank which has recently found itself out of favor with domestic investors, Morgan Stanley, has a notable presence in Euro sovereign league tables (at number 10). The biggest loser - the dynamic duo of vampire squid and Fed Jr.

Fed’s Brian Sack: "The Fed Will Be Embarking On A Tightening Cycle Like No Other In Its History"

From Brian P. Sack , Executive Vice President

Barney Frank Asks Top Four Banks To Write Down Second-Lien Mortgages, Claims Have No Economic Value

Full Barney Frank letter: Mr. Brian Moynihan Bank of America Mr.

Gary Gorton On The Shadow Banking System Run, And The Interplay Of Shadow And Traditional Banking

There are few people as qualified to discuss the stresses of (and on) the financial system over the past several years as Yale and Wharton Professor Gary Gorton , who just incidentally has held positions at the Bank Of England, the Federal Reserve and the FDIC. In a submission to Zero Hedge, Professor Gorton provides some unique perspectives into what we have long claimed was the immediate catalyst for the near collapse of the banking system: the bank run, not so much on depository institutions, but on the much more critical shadow banking system.

Renewed Battle For The Falkland Islands Suits The Embattled British, Argentine Leaders, And Others

Submitted by the Defense And Foreign Affairs Team at OilPrice.com Renewed Battle for the Falkland Islands Suits the Embattled British, Argentine Leaders, and Others The artificially-engendered revival of the dispute, which began in February 2010 between Argentina and the United Kingdom over the sovereignty of the Falkland Islands in the South Atlantic, has been portrayed as a posturing by embattled Argentine Pres. Cristina Fern

Some Afternoon Amusement Courtesy Of RBS: There Is No Spoon – Or Bank Run

We were pleasantly surprised earlier today when we discovered that the "head of European rates" at RBS, or as it is better known in the US as CRT LLC (see here , here and here ), Harvinder Sian, not only sends out mollifying notes to clients with extended references to "excitable" blogs such as Zero Hedge, but that apparently cost-cutting measures have forced RBS to cancel their over-budget Dow Jones wire service. Our good friends at Alphaville , who it turns out are the first and last (and also somewhere in the middle) to diligently comb through RBS research, point out this amusing note that was sent out earlier (emphasis from the original): The Greek rumour mill today centres on risks for the banking sector. The website Zero Hedge carries a rather hysterical story that “Greeks Scramble To Pull Out €8 Billion From Local Banks As Greece Responds With Money Control Measures”.

Full Bernanke Testimony And Live Webcast

Congressional testimony can be watched here, pundit commentary free . Chairman Frank, Ranking Member Bachus, and other members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress.

Comparing The Fed Funds Rate With The Primary Credit (Discount) Rate Over The Past Decade

Much has been said about the 25 basis point Discount Rate rate hike announced on Thursday.