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Tuesday, January 3

3rd Jan - Even Calmer

I am still updating the 2011 and 2012 posts, have fun with these reads!

- MoreLiver

News (3-Jan evening) – BTH
Recap (3-Jan) – GMT
FX option vols – Saxo
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ

Then to today's links:

Claim theory (longish and wonkish) Free exchange / The Economist
Large gap between potential payouts and claims: either pool of payers increased or claims decreased. Governments are trying to force losses onto households in order to avoid a financial blow-up. But such losses are almost certainly not sustainable.

Would A Ponzi By Any Other Name Smell As Bad? Peter Tchir / ZH
On the collateral (”quality” bonds) manufacturing by Greece and Italy.

The Decline and Fall of the Euro?Daniel Gros / Project Syndicate
In today’s Europe, the conflict between creditors and debtors takes a more civilized form, seen only in European Council resolutions and internal ECB discussions. But it remains an unresolved conflict. If the euro fails as a result, it will not be because no solution was possible, but because policymakers would not do what was necessary.
Greece Threatening to Leave Euro: A Harbinger of What’s to Come?HistorySquared
Unless they are given more loans. Politicians in Portugal, Italy, Spain, and Ireland are watching and will use the Greece example to make their own threats, demanding debt concessions, either publicly or behind closed doors.

Belgium, Netherlands Complete Bill Auctions; ECB Deposit Facility Usage Soars To Second Highest EverZH
And speaking of the LTRO, that carry trade concept is now dead with the year end cash parking theory scrapped following the announcement thet banks parked the second highest amount in history at the ECB, or €446 billion, just shy of the €452 billion hit on Dec 27.

Pawnbrokers of last resort: when a pound of flesh is not enoughalphaville / FT
Deflation danger: It’s logical that any shift towards collateralisation and away from unsecured lending leads to credit contraction.

2011 / 2012
Thomson Reuters 2011 Debt Capital Markets ReviewHere Is The City

2012 could be the year Germany lets the euro dieEvans-Pritchard / The Telegraph
It must either immolate itself, accepting a debt union and internal inflation to save a currency it never wanted and doesn't love; or opt instead to uphold fiscal sovereignty and the essence of its own democracy, and let the Project die.

Morgan Stanley Issues Shocker With First 2012 Forecast: Says S&P Will Close Year At 1167, Sees Consensus As Too OptimisticZH

Global Bond Issuance To Top A Staggering $8 Trillion In 2012ZH
Nice graphs and analysis from S&P and other sources.

Will the global economy finally recover in 2012?The Curious Capitalist / TIME
All of this adds up to a 2012 potentially uglier than 2011. All eyes will remain fixed, first and foremost, on Europe and its debt crisis. The U.S.presidential election and the political turmoil in the Middle East, Russia and elsewhere will also be on watch.

What happens when oil capacity runs short?Wonkblog / WP
When oil supplies are tight and there’s little spare capacity left, even minor shifts in the market (not to mention various geopolitical crises) can produce crippling oil price spikes, as we saw back in 2007 and 2008.

Idiot Noise TradersThe Psy-Fi Blog
Short article on what, when and who noise trades, and how that affects markets.

the haircutthe research puzzle
Reducing expectations should be a part of investment planning.

King of the Cosmos (A Profile of Neil deGrasse Tyson)Carl Zimmer
A profile of celebrity astrophysicist from January’s Playboy magazine.

The Act partDeus Ex Macchiato
Stuff from military, OODA loops: observe, orient, decide, and act

Chimpanzees consider their audience when communicatingBBC