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Monday, January 9

9th Jan - Negative Yields

News 9-Jan evening – BTH
Recap 9-Jan GMT
FX option vols – Saxo
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ

Quote of the Day: How long until LCH wakes up again and hikes margins sending the entire European bond complex a step function lower? – “Tyler Durden” / Zero Hedge

I Remember When The Dynamic Duo Was Batman And RobinTF Market Advisors
What can Merkozy give? commitment to budget discipline, creating a junk bank, a sermon to disbelivers or QE: QE implies some ability to get paid back or to stop easing by selling assets back to the market.  Quantitative Gift Giving is simply throwing money at assets that will never be repaid.  How did Greece come up with €1 billion to buy preferred shares of NBG?

If no trade reversal now, then when?
Europe’s underlying problem is not budget deficits or even unsustainable debt.  These are mainly symptoms.  The real problem with Europe is the huge divergence in costs between the core and the periphery

The unprecedented behaviour of the central banksGavyn Davies / FT
In economic policy nowadays, the unthinkable suddenly becomes the inevitable, without pausing for long in the realm of the improbable. Nowhere has this been more true than in central banking, where the recent huge expansion in the size of balance sheets would have seemed inconceivable as recently as 4 years ago.

Germans and AliensKrugman / NYT
So the German demand is that everyone run a current account surplus, just like they do — something that would only be possible if we can find someone or something else to buy our exports.

Germany Issues Bills With Negative Yields As Economists Agree Country Is In RecessionZH
Negative yields at the house of Bubaalphaville / FT

Enough austerity, it’s time for reformHugo Dixon / Reuters
There is a crying need to distinguish between fiscal austerity and structural reform…A policy mix that emphasizes the latter and draws some sort of line under the former is needed to stop the euro crisis spinning out of control.

Fitch Takes a Look at Global Fallout From EuropeHistorySquared

Decommissioning Dexia — a collateral storyalphaville / FT
Was it Dexia that pushed the ECB’s marginal lending facility to record highs?

Spirale Di Morte?TF Market Advisors
Mediobanca is the largest shareholder of Unicredit (as we sent out last week).  Mediobanca has underwritten 10% of the rights offering.  When will Mediobanca need to do its own rights offering?  Will their biggest shareholder (UniCredit) underwrite some of Mediobanca’s rights offering?

Greece Spends Bailout Cash On European Military PurchasesZH

Greece needs 'massive' EU
Country must quit euro unless bloc willing to offer huge aid, Czech central banker says

Herd On The Street: Company Analysts All In This TogetherMarketBeat / WSJ

Dollar’s Gain Could Be Earnings PainMarketBeat / WSJ

SocGen On Hildebrand Departure Next Steps: "Will SNB Have To Make A Move?"ZH

The Next Head of the SNB – Thomas J. JordanBruce Krasting

2012: A Gold Odyssey? The Year AheadGoldman Sachs via ZH
The 12-page research note on scribd.

Gold Tipped to Keep on ShiningThe Source / WSJ

The Global Impact of a China Hard LandingHistorySquared
Industrial commodities and related countries (i.e. Brazil, Australia, Peru, Argentina), exporters to China, Hong Kong banks

Is China already rebalancing?alphaville / FT
Investments are not as large part of the
GDP mix as reported – consumption is larger than the stats show.

UBS Technical Strategy 2012: Fasten Your Seatbelt 2.0…The Trader
Has a link to the full document.

Equal Weighting: A Timely Antidote For Uncertainty?The Capital Spectator
Naïve strategies that deliver decent returns sounds counterintuitive, but this is finance and so the risk of trying too hard should be considered.

Financial Stability Reports:What Are They Good For?IMF
We examine the recent experience with central banks’ financial stability reports, and find—despite some progress in recent years—that forward-looking perspective and analysis of financial interconnectedness are often lacking.

Euro crisis, Brent oil editionalphaville / FT
In euros, oil is as expensive as during the 2008 peak.

Nordic Outlook 2012Danske (pdf)
Recession time.

The difference between speculating and investingSaxo

Richard Feynman on Why QuestionsFarnam Street

The Zen of Steve Jobs: A Graphic Novella About “The Lost Years”brain pickings