Summary: Short post for now, again posted away all my material yesterday: China in your hand and End The Market Correlation. The #OWS has been updated. I will post later today, and on Saturday will post a Weekender with more thematic picks (stocks, Benford’s Law) and a Best of the Week – picks from this week’s posts. Feed me with a comment, follow me on Twitter, Facebook or email me.
Quote of the day: Howard Buffett said his father, billionaire Warren Buffett, plans to work until death leading Berkshire Hathaway Inc. and isn’t considering retirement. “That word is not in his vocabulary, he says when he goes to the grave he will communicate with us via Ouija board.” – BB
News (Thu evening) – BTH
News (Fri morning) – BTH
FX option vols – Saxo
TV: Bloomberg, CNBC, BBC World News
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT
EURO CRISIS
Italy Prime Minister Calls for Vote of Confidence after Losing Routine Budget Vote; Italian Bond Yield Surges to 5.82%, No Support Except by ECB – Mish’s
“Because the parliaments of all 17 euro members have to approve any major crisis-fighting decision, such as this expansion of EFSF powers or the second Greek bailout, politicians in every euro zone capital can use euro zone policy to settle domestic political scores, achieve political goals, or pander to local voters.”
Morning Briefing: Reasons to be cheerful – BNY Mellon
Looks at the possible treaty changes in the euro zone.
FINANCIAL CRISIS
Fitch Installs Its Own Glass-Steagall – naked capitalism
“Fitch tries to position itself as the “we try harder” ratings agency, taking more aggressive ratings actions relative to Standard and Poor’s and Moody’s. For instance, it started issuing warnings about and then downgrading CMBS before its two larger competitors pre-crisis. The open question here is whether other bond graders will follow its lead.”
Fitch Downgrades UBS, Many Others, Puts Morgan Stanley, Bank of America, Goldman, BNP, Deutsche Bank, SocGen And Others On Watch Negative – ZH
Is a Swedish housing panic a bank killer? – tradingfloor.com
Real estate prices have risen quickly but now transaction volume has collapsed and prices have declined. Banking sector is large part of the economy and exposed to house prices.
CHINA
M2 growth is slowing, but due to the growth of shadow banking, the measure is not reliable.
IMF’s outlook estimates that for every 1% of inflation in China, 0.25-0.5% is exported to APAC countries.
Chinese Banks Deteriorate; Loan Sharks Come Knocking; Copper Ponzi Financing Revisited; 5 Reasons to Expect Lower Commodity Prices – Mish’s
OTHER
ETFs: The New Fear Indicator – MarketBeat / WSJ
ETF trading volume 30%, individual stocks 70%, up from 22%/78% during the first half of the year. Some use the ratio to measure how much (or little) investors believe in the importance of corporate fundamentals.
“From the very beginning of the revolt in the Middle East, Riyadh has reached beyond its borders to influence events. So far, the kingdom has successfully outmaneuvered its rival Iran. Democracy, meanwhile, hasn't even qualified as an afterthought.”