21st Sep Late - Waiting for Mr. Godot

Summary: This post’s euro bank links are really worth reading, as well as the latest Fed Watch links. Today's post title tells my view exactly - the Fed is practically toothless. You may wait, but he will not come up with anything that could solve the really important issues. If you need more Fed stuff, check my Super Fed Watch. UBS rogue trader and What happens if Greece defaults? have also been popular posts. Leave a comment, follow me on Twitter or email me.

I could not resist putting this video here, because every time I hear this, I just have to party! Safe for work, only the song plays. Happy Ben-Watch!

FX option vols 21^st Sep 12:30 GMT

Vols, Risk Reversals & Pin Risk – tradingfloor.com

EURO CRISIS

Italy’s CDS is now wider than any Eastern European or Middle Eastern country, except Ukraine.

** Italy – bite-sized CDS, taste the volatility – alphaville / FT

Very funny and true. Europe selling copies of “Big Issue”. LOL

** And the Winners are… – Macro Man

Nothing new, but an interesting read.

The Fatal Flaws in the Eurozone and What They Mean for You – chrismartenson.com

The axing of 100,000 public-sector jobs is bound to cause a change of government, making the future even less unpredictable.

Greeks Have No Good Choices – The Source / WSJ

The euro crisis as the revenge of neofunctionalism – euobserver.com

Euro banks

Most importantly, collateral need not be traded on a regulated market.

** ECB collateral changes… – alphaville / FT

ECB Eases Collateral Requirements – ZH

French Banks Resume Tumble After ECB Announces One Bank Taps Dollar Swap Line For $500 MM Again – ZH

Euro Bank Run: Lloyd's Of London Pulls Cash From European Banks – ZH

Nasty: IMF originally mentioned a lower figure, met huge resistance from European central bankers and now the number they announced is even bigger. By the way, they are right.

IMF Pours Cold Water For Second Day In A Row, Sees €300 Billion In Euro Bank Risk Exposure – ZH

Or more specifically, why are the tests designed to be non-stressful?

Why Do Banking Regulators Bother to Conduct Faux Stress Tests? – EconoMonitor

FED WATCH

** Rosenberg: 10 reasons not to be short in front of the Fed decision – Pragmatic Capitalism

Views from Barclays, CRT, Nomura, MS, GS, CS, ICAP, Janney

** Happy Fed Day! Now Who’s Going to Be Disappointed? – MarketBeat / WSJ

Speculators Haven’t Piled Into Treasurys Ahead of Operation Twist – MarketBeat / WSJ

** Pushing on a String – The Big Picture

OTHER

Bonds: global junk bond default rates are around historical lows, just like in 2007.

The right or the wrong time to take risk? – Buttonwood / The Economist

Stocks: UBS’s technical analysis: still bearish, but time to buy weakness

Make or Break-Technicals – the trader

BoE MPC minutes – market reaction and comment – alphaville / FT

With full GS research piece

UK QE To Resume In October – ZH