Read the TF Market Advisors' second link. Something bad is about to happen. The LTRO fiasco is now plainly visible, with almost all the newly lent money parked right back to the ECB. Maybe, just maybe it is sitting there over the end of the year, but equally likely is that now the eurocrats and especially the ECB have lost the game. They have done everything short of full-blown backstop and still there is no appetite for bonds.
There is an Italian bond auction on Thursday. It will be very, very closely watched.
Quote of the day: When the water rises, so does the boat – Hagakure
News (Wed evening) – BTH
Recap (28-Dec) – GMT
FX option vols – Saxo
Markets Live – alphaville / FT
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
EURO CRISIS
Italian Yield Curve – TF Market Advisors
Given all the intervention, I think the basis swap is telling us that the market continues to deteriorate for Europeans and the overly steep Italian yield curve is a sign that manipulation is driving prices and not actual market belief in a resolution.
Why Is The Euro Dropping? – TF Market Advisors
The sad truth is that someone probably does know something, and although we may bounce back from this brief sell-off, none of the issues mentioned are going away and will need to be dealt with.
"It's a Mistake To Pursue a United States of Europe" says German Supreme Court Justice in Spiegel Interview ; Interpretation of Interview from Saxo Bank Chief Economist – Mish’s
European Bank-to-Bank Lending Mistrust Hits Second Consecutive High; ECB's LTRO Won't Stop Collateral Contagion – Mish’s
Long article, embedded scribd
Art Cashin Exposes The Behind The Scenes Panic In Europe – ZH
UBS’s Cashin notes LTRO was almost useless and a risk of bank runs in Italy and Greece is growing.
UBS’s Cashin notes LTRO was almost useless and a risk of bank runs in Italy and Greece is growing.
UBS believes 2012 in Europe will not be like 2011 – ZH
Five reasons: ECB’s coming rate cut and QE would hurt the euro, Greece PSI deadline 20-Mar, contagion risk to Portugal and beyond, CDS triggering, voters turning against the europrojects.
Five reasons: ECB’s coming rate cut and QE would hurt the euro, Greece PSI deadline 20-Mar, contagion risk to Portugal and beyond, CDS triggering, voters turning against the europrojects.
2012
Things that make you go hmmm… – ZH
Lookback to 2011 by Grant Williams.
My Christmas present to you — short Eurodollars – Peter Brandt
A trade idea and a lot of bullet points on what to expect in 2012.
What to Expect in 2012 – DealBook / NYT
Legal/Regulatory / White Collar Watch
Legal/Regulatory / White Collar Watch
OTHER
Marginal revolutionaries – The Economist
The crisis and the blogosphere have opened mainstream economics up to new attack
seeing the trades – the research puzzle
Looking at each trade would answer many questions, but is a rare opportunity.
Economic Cycles and Investing – The Big Picture
Collection of classic charts on the economic cycle.
Psychological Market Cycles – The Big Picture
..and a related post from 20-Dec.
DIVERSION
If this were your last day alive what would you do – Say It Ain’t So, Joe!
Writer Joe Bodolai’s suicide note is a good one – RIP.
Fashioning Apollo: How the Spacesuit Came To Be – brain pickings
What Neil Armstrong has to do with combinatorial creativity, underdog innovators, and sports bras.
The 6 Weirdest Things That Are Ruining Your Memory – cracked.com
Management Talk Awareness Week – Macro Man
Please stop using words like ’bandwidth’ in non-technological context.
An interesting piece in China Defense Daily lays out some of the characteristics necessary for “a highly effective command system for cyber war mobilization.”
Kim Jong-un Survivability Scorecard: What to Look for – CFR