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Wednesday, November 16

16th Nov - Who blinks first dies

Just posted a credit overview guest post by Macronomics, and for my European readers please note last night's linkfest Rain in Spain. Here are today’s links.

News (Wed morning) – BTH
Recap Nov-15 – Global Macro Trading

Danske Daily Nov-16 – Danske Bank (pdf)
FX option vols – Saxo
Markets Live – alphaville FT
Debt crisis: live – The Telegraph
EZ crisis Live blog – The World / FT

Presenting Deutsche Bank's Pitchbook To The ECB To Go "All In"ZH
With full slides on DB’s report “The Tipping Point – Time to Call the ECB”. This week's must-read - and it's only Wednesday!

Presenting Europe's Remaining 2011 Bond And Bill Auctions... All 104 Of ThemZH
This is a good one from Barclays - has details too!

Revisiting The "Biggest Ever Headfake" Out Of Europe ZH
DB comments the resilience of the euro’s exchange rate: portfolio liquidation and related bond flows have supported the euro, but as problems reach the core, the periphery outflows will not end up in the core. Still: EUR is probably the worst instrument to express negative EUR area views, with both periphery bonds and equities purer gauges of stress.

Is the ECB Determined to Go Down with the Ship?Twenty-Cent Paradigms
Another article arguing for more bond market support from the ECB

EFSF Miracles: Mark 6:30-44Walter Molano / EconoMonitor
However, the EFSF is having trouble getting its funding above €20 billion. Therefore, the thought that the EFSF will be able to leverage itself and supply all of Europe’s financial needs is no different than the miraculous multiplication of the loaves of bread and fishes.

OTC derivatives market activity in the first half of 2011BIS
After an increase of only 3% in the second half of 2010, total notional amounts outstanding of over-the-counter (OTC) derivatives rose by 18% in the first half of 2011, reaching $708 trillion by the end of June 2011. Notional amounts outstanding of credit default swaps (CDS) grew by 8%, while outstanding equity-linked contracts went up by 21%.

Can shadow banking be addressed without the balance sheet of the sovereign?
The shadow banking system is vast; but why did it arise? Some view it as regulatory arbitrage while others view it as the market fulfilling investors’ demand for ‘riskless’ assets. This column explains the issues and discusses policy options.

Who caused the housing crisis? Why do people not believe all the studies?Fabius Maximus
With lots of links to published research.

Double dips: When will they meet again?Free exchange / The Economist
Unfortunately, it seems more likely that Europe's failure will knock the American economy off its relatively sound footing.