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Monday, July 23

23rd Jul - US Open: Europeanic

Spain and, less importantly, Greece are dominating the headlines. Italy is also getting some mentions, but very limited as of now. Time to go long Spain & short Italy?

What you missed during the weekend:
Weekender: Trading & Markets (trading, economics, regulation...)
Weekender: Euro Crisis (that never ends, until it’s over)
Weekender: Weekly Support (weekly reviews and previews, updated!)
Weekender: Best of The Week (from past week’s posts)

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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
  Spanish crisis reaches critical stage as borrowing costs top 7.5%; Up to six Spanish regions set to request financial aid from Spanish state

Morning MarketBeat: Dow Theory Suggests More Trouble Ahead – WSJ
Broker Note Briefing – WSJ
Morning Take-Out – NYT
– Marc to Market
AM Dear Dairy: Bear Prowl – Macro and Cheese

Spain, Greece, Spain, Greece, Spain TF MarketAdvisors

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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UBS: Euro depreciation: Implications for GDPZH
UBS: Clients have asked if this might trigger a GDP forecast upgrade for the common currency area. The short answer is no; the currency has depreciated on fear and risk aversion – and economic growth tends to suffer rather than flourish in that environment.

Russian/Euro Credit Crisis AnalogNJB Deflator
the second half of a timeline on the Russian/Asian Credit Crisis of the late-90s that I amended with what I think are the analogous happenings of the Euro Crisis.

Spain's maturing debt. Need money.
Spanish regional debt totals and as percent of regional GDPCredit Writedowns
GDP of $1 trillion for all of Spain, with 140 billion euros of regional government debt or 13% of GDP.

A quick maturities reminder, featuring Spain and Italyalphaville / FT
things are still not too painful - Spain’s average funding cost is still 4.1 per cent, at an average maturity of 6.4 years — but it is getting awfully ugly awfully quick.

Blaming the Spanish victim as Europe spirals into summer crisisThe Telegraph
The claims are self-serving spin by Europe’s incompetent policy elite. Once again, they are blaming the victim for the consequences of their own scorched-earth monetary, fiscal, and regulatory policies.

Not wanting to be left out, Spain’s CDS widenalphaville / FT
Credit default swaps also want in on the “Spain’s [insert financial instrument] reach record highs” headlines.

EuroCrisis Intensifies as Spain Spirals Downward, Greek Impasse Nighnaked capitalism
It’s hard to foresee how this ends, but if the powers that be are balking at another €10 billion to €50 billion for Greece, they will not pony up the hundreds of billions that many analysts see as necessary for Spain. The Eurocrats are running out of runway, and there’s no sign of a Plan B. If we didn’t all have a stake in the outcome, this would make for great theater.

Troika in Greece amid renewed euro-exit talkeuobserver
Officials from the troika of international lenders are back in Athens on Tuesday amid renewed talk in Germany of a Greek euro exit.

German Vice Chancellor "Very Skeptical" Greece Can Be Rescued, Euro Exit has "Lost its Terror"; Will Defeat Be Snatched From the Jaws of Victory Once Again?Mish’s
In the short-term Greece is likely doomed either way. In the long-term Greece has a chance once it rids itself of the shackles of the euro. Hyperinflation may be Greece's destiny, but if so, I see no point in delaying it.

China’s demographic perfect storm: the ultimate growth killerASA
although there are ways for China to further enhance productivity that could promote growth, China is facing serious demographic challenges “that are not generally as yet appreciated, apparently even by Beijing’s leadership”, and we have to be prepared for a China which, in the next 2 decades, will grow at a much slower rate than what is generally expected.

Investors betting on QE3 may find themselves in a crowded tradeSober Look
Leveraged investors such as hedge funds are piling into longer term treasuries and other rate product in anticipation of QE3. The speculative long positions are near records.

John Williams Gets ItTim Duy’s Fed Watch
Williams again telegraphs his belief that the Fed should engage in additional quantitative easing, and makes a big step in calling for an open-ended program.  It is not, however, clear the Bernanke has come to the same conclusion.  It's really Bernanke, not the Fed hawks, that has been the impediment to further easing.

On FXBruce Krasting
Swiss franc, Fed, Eurocrats’ response to Spain

Divergence Does Not Bode Well for Stocks & CreditBondSquawk
…the recent run in the S&P 500 could appear corrective in a much larger intermediate downward trend. If this is indeed the case, this recent divergence between stocks and bond yields could be short-lived and a re-pricing of risk assets may be on the horizon.

Dollar Opens New Week on Firm NoteMarc to Market
1) more regions are going to follow Valencia's request for government aid  2) IMF has concluded that Greece will be unable to bring its debt down to 120% of GDP by 2020 and therefore will not commit fresh funds 3) Chinese officials seem quite somber about the world's second largest economy

Weekly Market Comment: Extraordinary StrainsHussman Funds
Investors often have the impression that the market simply collapses once a bull market peak is set, but this isn’t typical. What is typical is exactly the sort of exhaustion pattern we’ve observed since April.

Grant Williams’ Things that make you go hmmm – via The Trader, (full pdf)