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Tuesday, July 17

17th Jul - US Open: Heeeere's Benny!

Bernanke will soon start his babbling, and S&P has edged slightly up ahead of the event. No reason now to be in the markets – short-term target around 1360 is already too close. Reports that Finland and Spain have agreed on the bailout collaterals, but details are scarce – they have to be, because the collaterals have negative net present value and politically it is important for the Finnish government to pretend the collateral agreement is worth something. In today's links some Fed watch-articles, couple of really good ones on Europe, and a collection of interesting articles in Finnish for my native audience. 

Previously on MoreLiver’s:

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News & Recap – RanSquawk / ZH
Frontrunning – ZH
Overnight Summary – BofA / ZH
The Lunch Wrap – FT
Emerging N.Y. headlines – FT
Today’s front pages – presseurop
Daily press summary – Open Europe

Morning MarketBeat: Bernanke Testimony Takes Center Stage – WSJ
Broker Note Briefing – WSJ
Morning Take-Out – NYT

On hold for Mr BenankeKiron Sarkar / The Big Picture
AM Dear Dairy: Steady – Macro and Cheese

Pre-market Commentary – Marketwatch
Pre-Market Trading – CNNMoney
Pre-Market – NASDAQ
US Equity Preview – Bloomberg
Earnings & Events – The Street
MarketCurrents – Seeking Alpha
Debt crisis: live – The Telegraph
The Euro Crisis Blog – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices

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The ECB’s Swedish planMacroBusiness
I’m not completely sure why, after years of demanding the opposite, the ECB has suddenly changed its mind. Perhaps this is more screw turning by the central bank or perhaps recognition that the emergency mechanisms simply aren’t going to be large enough to do the job…Is the Eurozone, and more explicitly the ECB, suddenly running the Swedish playbook ?

The unacceptable behavior of the market mpettis
(Heavy on Spain and also China) Unfortunately there isn't much that can be done in a big enough or credible enough way to reverse the downward spiral, and this is why I don't pay too much attention any more to the proposals and counterproposals that are on offer in Europe.  I think it is probably too late for that…

Bad news for Italy and Spain from the IMFOpen Europe
The IMF is now predicting that Spain will face a further five years of an increasing debt burden

Germany's Leading Role in Weakening the EuroSpiegel
In the early 2000s, Germany was struggling to adhere to euro-zone criteria aimed at ensuring common currency stability. Instead of introducing austerity, however, Chancellor Gerhard Schröder simply launched an effort to change the rules. New documents show just how key his role was in weakening the Stability Pact.

Bernanke Could Signal Fed’s Next Step in TestimonyTIME

QE wink today or next time?The Big Picture
If Bernanke doesn’t give the market what it wants today, the ensuing market selloff in the context of a fragile economy will just clinch an eventual QE program. So we’ll get the wink today or next time.

Previewing Bernanke's 10 AM Congressional TestimonyZH
Goldman Sachs: FOMC will extend the forward rate guidance further at the July 31-August 1 meeting, and to return to asset purchases in late 2012/early 2013. An earlier return to asset purchases is possible if the data continue to disappoint, but we do not think that the hurdle has yet been met. We do not expect a cut in the interest rate on excess reserves (IOER) or a credit easing program along the lines of the Bank of England's "funding for lending" scheme, although both may well come up in Tuesday's testimony.

Fed Shifts Focus to Jobs as Unemployment Stalls Above 8%BB

Charts: HK/China mega-bear market and othersASA
HK/China market seem to top slightly ahead of US.

Is China’s electricity data worth any of your precious attention?alphaville / FT
Not only are there two diverging measures of electricity – output and consumption – but there are credible motives for local authorities to massage the figures both upwards and downwards, making it near impossible to hazard an educated guess at what the underlying picture might be.

The Globalized Economic Cycle The Source / WSJ
The current weakness can be seen as an echo of that 2008 crisis. Rescue attempts ignited an extensive rebound but didn’t fully resolve the underlying problems of excess private-sector debt in some countries like the U.S., the U.K., Ireland and Spain, or wider regional strains, like the current-account imbalances between core and periphery euro-zone countries or between the U.S. and China.

Goldman's Earnings Fall 12% in Second QuarterDealBook / NYT
Goldman Beats Modest Estimates As Prop Trading Revenue Plunges; Employee Comp Slides 16% From Year AgoZH

Eurooppa pankkiensa vankinaHenri Myllyniemi / Puheenvuoro / US
Jäljellä on kuulemma ainoana keinona enää setelirahoitus. Olen siitä samaa mieltä mikäli EMU:a yritetään pitää hengissä. Toinen vaihtoehto, eli esimerkiksi euroalueen sisäiset protektionistiset toimet pääoman, ihmisten ja työn liikkuvuuden estämiseksi maasta toiseen tuskin saa kattavaa kannatusta. Siihenkin voidaan kuitenkin ajautua. Eritoten, jos setelirahoituskeskustelu saa tyrmäävän vastaanoton.

Suomen eurotiestä on päätettävä vaaleillaThomas Wallgren / Vieraskynä / HS
Eurooppalainen solidaarisuus olisi helpompi hyväksyä, jos sille olisi alun perin haettu ja saatu lupa kansalta. Nyt kansalaisilta pitäisi kysyä Suomen tulevaisuudesta.

Taloustieteilijät arvioivat, mitä tapahtuisi, jos Suomi eroaisi eurostaHS

Neuvottelusuosituksia ERVV:n ja EVM:n suhteenSami Miettinen / Puheenvuoro / US
Vakuusperiaate on myös arvokas suoja Euroryhmän haastavissa yhteisvelkaneuvotteluissa. Sitä tarvitaan holtittomasti rakennetun ERVV:n yhteydessä. Paremmin toimivan EVM:n kanssa joudumme hyvin todennäköisesti pärjäämään ilman.

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