Christmas is over. Time for the eurocrats to start fiddling again. LTRO was a last-minute save for the European banks, given their refinancing needs ahead of 802bn of maturing debts this year. Greece, Spain, Hungary and Portugal look truly hopeless. 
Politically realistic options are completely impotent, as the core countries (=Germany) will not officially backstop the debt machine. The only option left is more plausible deniability undemocratic stealth support from the ECB - 500 bn of new LTRO should do the trick for now. But that is just peeing in the pants in the winter, and leaves open the question what will later be done to the balance sheet of the central bank. To quote my venerable economics professor who made even Krugman sound like a politically correct bottom-kisser: "Guess who will take the piss on their pants? The average Joe on the street". The beatings will continue until morale improves.
- MoreLiver
News 6-Jan morning – BTH
Daily 6-Jan – Danske (pdf)
Morning Briefing 6-Jan – BNY Mellon
Market Preview 6-Jan – Saxo
FX option vols – Saxo
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
To today's links:
EURO CRISIS
Maturing EU bank debt may hit a wall in 2012 – Sober Look
Roll needs in 2010 3bn, in 2011 110bn (had to be financed by the ECB), and this year 802bn.
ECB on hold as the economy gradually improves – Danske (pdf)
Macro data appears to have stopped deteriorating and market sentiment has improved in recent weeks…The market is currently pricing a 25bp cut around March.
More power for EU commission in new draft of fiscal treaty – euobserver.com
EU members discuss the latest draft today, meeting on 30-Jan to look at the more complete version, aiming to adopt it on Mar-1 summit.
Markets punish Hungary for power grab on central bank – euobserver.com
GREECE
Greek VoluntaryInvolutary DealNoDealDeal: Convolution Eupdate – Credit Slips
“Without an agreement with the troika and the ensuing funding, Greece faces the threat of a disorderly default in March.” Disorderly default. Greek politicians muttered threats before, and each time, money materialized. But last October, the Troika said no.
CMA Now Officially Assumes 20% Recovery In Greek Default – ZH
The standard assumption for sovereign recovery rate is 40%.
The standard assumption for sovereign recovery rate is 40%.
SPAIN
Spain, unlike Italy, has a housing and real estate bubble. The full magnitude of the cost of this is still unclear. Investors and policy makers have a greater sense of Italy’s financial burdens than Spain’s.
Hampered by a remarkable collapse of private debt and struggling to sell its public debt on the market, Spain is in an economic free fall
€176 billion of non-performing real-estate loans and foreclosed assets (52% of the banking system’s total property book).
OTHER
For central bankers, unconventional is the new conventional – The Economist
Alan Blinder, a Princeton economist and former Fed official, has likened them to a family that lets its crazy aunt out of the closet only on special occasions. QE is “best kept in the locker marked ‘For Emergency Use Only’”, is how Charlie Bean, the Bank of England’s deputy governor, put it in 2010.
Jeff Gundlach Complete Slideshow Presentation – ZH
Long presentation “Just Markets” from the company with 22bn+ assets under management.
Long presentation “Just Markets” from the company with 22bn+ assets under management.
Complete Cheatsheet For What To Buy Ahead Of QE3 – ZH
SocGen’s research note. Their idea is to buy gold.
SocGen’s research note. Their idea is to buy gold.
Infographic: All The World’s Gold – numbersleuth
Therefore, Putin is not likely to win a majority and if he were elected his election would be judged unfair and illegitimate. Both the Duma elections and the presidential elections need to be repeated after decent electoral laws have been adopted. The recent mass demonstrations have shown the strength of the resistance.