21st Sep Early - Way of the exploding can-kick

Summary: European Commission was happy with the teleconference between the troika and Greece, so expect massive public sector layoffs and the payment of the next bailout tranche in early October. The can has been kicked, again. FOMC press coming later today, I will soon post a collection of the recent Fed watch links. Three posts yesterday. UBS rogue trader updated. Leave a comment, follow me on Twitter or email me. What happens if Greece defaults?

Views: Further easing from FED is completely expected by the markets, so instead of the normal sell-on-the-news, I actually think the opposite happens: expect a two-day risk-on party after the announcements, whatever they are.

News roundup:

 Wednesday Watch – Between The Hedges

FX options 21^st Sep 07:00 GMT

Vols, Risk Reversals & Pin Risk – tradingfloor.com

 

EURO CRISIS

The Germany’s strength is because of PIIGS weakness

** There is a great sense of denial in Europe – Billy Blog

Main lesson: no bailouts

** A fiscal union for the euro: Some lessons from history – voxeu.org

“Enhanced Cooperation is an EU procedure where a minimum of nine EU member states are allowed to establish advanced integration or cooperation in an area within EU structures but without the other members being involved.”

Here's How Europe Can Expand The Bailout, Even If All The Countries Don't Agree – BI

“The EFSF is not part of the EU Treaties and is a separate special purpose vehicle; therefore enhanced cooperation cannot apply to it.”

Wait! Here's Why Europe DOES Need Every Country To Agree To Expand The EFSF – BI

Greece Promises To Front-Load Austerity Even As Troika Has Not Yet Agreed To Provide Next Dose Of Monetary Heroin – ZH

FED WATCH

Presignaled: twist, lower interest on excess reserves or better communication.

** Don't expect miracles from the Fed – Humble Student of The Markets

Credit Suisse on where the market has mispriced Twist – alphaville / FT

Bernanke's Cheat Sheet: SocGen Lays Out The Probability Matrix Of The Fed's Six Options – ZH

Goldman Fires Another Warning Shot Across Bernanke's Bow – ZH

Goldman Says ‘Operation Twist’ Is Going To Be $300-$400 Billion – The Daily Capitalist

Review and comments on Rosenberg’s suggestions of alternative Fed actions

Six Things the Fed May Announce Tomorrow (But Likely Won't); Would Any of Them Matter? Gaming the Reaction – Mish’s

On Eve Of Critical FOMC Decision, Republicans (Re)Send Letter To Bernanke Demanding No More QE – ZH

The Twist and Shout Should Be the Fed’s Next Maneuver: View – BB

OTHER

Most of the growth is just loans about to go bad. Go long corruption and short property.

** Jim Chanos Debunks The Myth Of China As The World's "White Knight" – ZH

Transcript of the World Economic Outlook (WEO) Press Briefing – IMF

Transcript of the Press Briefing on the Fiscal Monitor – IMF

The UBS-Adoboli Scandal Shows the Problem of Negatively Skewed Risk is Still With Us – EconoMonitor

DIVERSION

On The Bright Side, Some People Got $130mm Worth Of Free Poker – Dealbreaker

Reading the Full Tilt Poker “Ponzi” Complaint – Infectious Greed