9th Aug LATE – before the Fed press release

View: Keep the Brazil short.

Joke of the Day: “The Commanding General is well aware the forecasts are no good.  However, he needs them for planning purposes.”

- Kenneth Arrow, Nobel Laureate Economist, recalling the response he and colleagues received during the Second World War when they demonstrated that the military’s long-term weather forecasts were useless.  Via World Beta

EURO CRISIS

ECB’s Trichet and successor Draghi sent a letter to Italian government urging faster spending cuts, overhaul of Italy's labor rules and liberalization of businesses

ECB Puts Pressure on Italy – WSJ

RBS on the ECB’s bond buying: even though periphery spreads tightened, bank stocks were hit, suggesting only a temporary and artificial effect. Evolution Securities believes that key is coming bond auctions – can Spain and Italy sell bonds at the narrower spread?

What price, sovereign risk? – alphaville FT

Nomura: damage to the ECB balance sheet can be assumed to be a cost mainly for Germany and France to pay. Citi: France’s CDS widest of any AAA country, underpins the EFSF’s AAA rating.

The distressed euro, via French (and German) CDS – alphaville FT

Very good read, written mostly around comments from RBS, Barclays, Commerzbank, ex-ECB people.

Trichet Turns ‘President of Europe’ Amid Crisis – BB

Greek Bank Run Continues Unabated: €3.8 Billion In June Outflows Bring Total Deposit Base To Mid-2007 Levels – Zero Hedge

Dutch Finance Minister Stirs Up EFSF Debate – The Source WSJ

FOMC FATCH

Two Previews The FOMC Rate Decision Later Today, In Which Goldman Says "A Little More Easing May Be Needed" – Zero Hedge

Will the FOMC Repeat the Mistake of September, 2008? – EconoMonitor

FOMC Meeting Thoughts – Calculated Risk

What the Fed should do – Ezra Klein WP

The Fed’s Stuck – The Source WSJ

Dr. Feelgood back in town?! – The Big Picture

OTHER (LONG-TERM STUFF)

Bad demographics, little external demand for Jp-bonds. How do they roll them in the future? They need the trade balance surplus for that. What happens when the rest of Asia eat away Japan’s surplus?

Worst Demand on Record for Japanese 40-Year Bonds; Can Japan Service its Debt? How? – Mish’s

The Central Bankers' Dilemma Bubble Chart – Zero Hedge

OPERATORS

Six Questions for BoA’s Brian Moynihan – Dealbook NYT

http://dealbook.nytimes.com/2011/08/09/six-questions-for-brian-moynihan/

Goldman Gives Details on Lackluster Quarter – Dealbook NYT

Goldman: cutting, repoing, provisioning, losing – alphaville FT

Goldman Crashes To Earth: Reports 24% Trading Day Losses In Q2, Compared to 1% In Q1 – Zero Hedge

DIVERSION (again, literally)

Nomura’s Riot special

Anarchy in the UK – alphaville FT

Airplane Flying Banner By S&P Offices: ‘Thanks For The Downgrade. You Should All Be Fired.’ – New York Observer