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Thursday, September 15

15th Sep Late - Swap lines are now open, order now

Summary: USD swap lines extended, consensus view seems to be this is just kicking the can and you should sell on news, rogue trader at UBS ($2b, ETF). In Europe the duopoly of Germany and France have told everyone how Greece is part of Europe, like we didn’t know that already. Later "extra" post coming on the USB, as it is just crisis porn and more suitable for late-night viewing. And follow me on Twitter or email me.

Views: The next tranche to Greece will be paid out, just after the pesky Finns fall into breaking their election-winning promise of “no new bailouts without collateral”. After that, a week, maybe two, and the Greece fails.

EURO CRISIS:

“The EU needs more than a financial solution to a financial problem. To restore credit, it needs to restore belief -- not only in the EU as a project, but in the competence and quiet efficiency of European political institutions.”


So-called six-pack legislation is done. Someone breaking fiscal rules, two warnings first and then 0.1%/GDP fine or max 0.2%/GDP fine if statistics are also falsified. Too little and too late, but I guess better than nothing.



GLOBAL LIQUIDITY BAILOUT
First the facts:
With BoE, ECB and Fed announcements, links to documents etc.

Same as above but shorter

Then the views:
You just have to read this

Peter Tchir of TF Market Advisors: prerequisite for the Greek default, CDS spreads possible next intervention target, markets still not pricing risk fully because of hyperactive interventions

“The move shouldn’t come as any surprise as we’ve become so accustomed to every pinch in liquidity to be relieved by the worlds’ central banks. It’s extend and pretend, kicking the can, etc.” The dollars still have to be paid back.

Bruce Krasting says the swap deal has been in the works for a while, and many people have been involved in it. That is why euro was up and gold was down before the news. He suggests selling on the news.
** On the swap – Zero Hedge

Facilities for USD funding at central banks already in place, so why the expanded them? Maybe because things are worse than the markets currently believe?

OTHER
** SNB: There is no inflation risk! – alphaville / FT

** The SNB Is Fighting a Phony War – The Source / WSJ



Interesting working paper – governments provide free puts, offer liquidity, pay for projects, support home ownership etc.

“observation suggests that sources of asymmetry in carry trades and in government bond returns can be fundamentally different.”

DIVERSION

“Categorization is a useful shortcut but reveals biases. And it plays a role in everything from ethnic violence to childhood development.”


What next for Apple? – Ultimi Barbarorum