Good grief

European finance chiefs ended crisis talks in Brussels yesterday by endorsing a Franco-German compromise on post-2013 rescues that means investors won’t automatically take losses to share the cost with taxpayers as German Chancellor Angela Merkel initially proposed to the consternation of bond traders.

The negotiations are funny, this goes back and forth. Bond holders should get the shaft, no they shouldn't, yes,...

Bond holders get the shaft, less often, but when they get it, they get it big. I predict the Irish deal is in doubt, protection goes way up in Spain, and Merkel reemerges with a bond holders getting the shaft statement.
And this:

The German push ran into criticism from policy makers elsewhere, who called it mistimed, and from European Central Bank President Jean-Claude Trichet, who warned it would unsettle bondholders. Germany yesterday backed away from the pitch for an automatic penalty, agreeing to give the International Monetary Fund a role in determining losses on a case-by-case basis.

There is an inventory bulge on the globe, and at some point, Belgium bankers are going to manage Spanish rental property.
This guy knows about cows:

“There’s plenty of herd behavior in the market,” EU Economic and Monetary Affairs Commissioner Olli Rehn said. “We want to clarify any possible confusion.”

Us and the cows learned it from the same source. We know it as economies of scale. The euro bond market is now incomplete, trades have coagulated on either side, and the trading becomes akin to bankruptcy negotiations. Why does this coagulation take place? Quantum economics tells us why, next chapter.
The Irish aren't stupid:

A day after more than 50,000 protesters marched through Dublin to denounce Cowen’s budget cuts to stave off financial ruin, the EU gave Ireland an extra year, until 2015, to get its budget deficit to the euro limit of 3 percent of gross domestic product.

This is very smart, kudos for Britain:

Close banking links led Britain, a non-euro user that didn’t contribute to Greece’s 110 billion-euro rescue in May, to contribute 3.8 billion euros to Ireland’s package.

“That is money we fully expect to get back,” Chancellor of the Exchequer George Osborne told reporters in Brussels. “It’s in everyone’s national interest and it’s in Britain’s national interest that we get some economic stability in Ireland and indeed across the euro zone.”

I see a big win for British bad property in Spain traded for German bad property in Ireland. British bakers being happier to manage Irish property on behalf of British pensioners.
Parrot talk:

Spanish Economy Minister Elena Salgado yesterday also reiterated that her economy -- the euro zone’s fourth-largest and almost twice the size of Portugal, Ireland and Greece combined --

Better idea Europe! You have tried all sort of bankruptcy mechanisms over the centuries. Europe, the continent, needs a natural continent wide bankruptcy market. Your gonna need a more fluid cross border property market.

These quotes came via Bloomberg I think.