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Wednesday, July 25

25th Jul - US Open: Back for air, down for more?

Breakeven inflation not low enough for QE
Risk is back, as SP bounces from a support level and EURUSD also respects the 1.20 level. Move is driven by talks of giving Greece a proper restructuring, more funds and most importantly, giving ESM a banking license. That last one is key – the size of the ESM is not enough to handle the crisis, and it would be a convenient way for the ECB to do quantitative easing via proxy (it is not allowed to perform QE directly). Germany and ECB oppose the idea, but for how long? It is worth remembering that there was talk last night from the Fed that further easing is right around the corner, but after a quick bounce the downtrend continued. I am very careful as we are approaching tipping point-levels in prices and in politics. But dropping those thoughts for now this should be a good time to get the shorts back on.

Previously on MoreLiver’s:
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
  El Economista: Germany wants Spain to request €300bn bailout; Catalonia will seek a bailout from the Spanish government

Morning MarketBeat: Apple’s Miss Tough to Shake – WSJ
Broker Note Briefing – WSJ
Morning Take-Out – NYT
Short Note On FX Market – Marc to Market
AM Dear Dairy: Apple Recovery – Macro and Cheese
How Dumb is Draghi? The Fed and AAPL tooTF MarketAdvisors

Pre-market Commentary – Marketwatch
Pre-Market Trading – CNNMoney
Pre-Market – NASDAQ
US Equity Preview – Bloomberg
Earnings & Events – The Street
MarketCurrents – Seeking Alpha

TV: Bloomberg, BBC
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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Europe is sleepwalking towards imminent disaster, warn top economistsThe Telegraph
The euro has completely broken down as a workable system and faces collapse with “incalculable economic losses and human suffering” unless there is a drastic change of course, according to a group of leading economists.

The bearish case for bundsButtonwood’s / The Economist
If the peripheral nations default, Germany will likely suffer massive bank writedowns, an export slump (2010 exports to the periphery were €218 billion) and a huge hit to the balance sheet of the Bundesbank thanks to the Target 2 imbalances

End of game? Don’t bet on
Charles Wyplosz: The EZ crisis is once again on the march; Spain and Italy are under pressure. This column argues that policymakers are likely to fall back once again on a failed approach to avoid admitting past errors. Ultimately, however, EZ leaders will come around to the only way forward – the ECB underwriting both banks and sovereigns while additional controls on bad banking and bad fiscal governance are put in place.

A Redemption Pact for Europe: Time to act
EZ leaders have failed to tame the crisis. This column presents the English language version of the new plan by the German Council of Experts to resolve the crisis via “redemption bonds” and accompanying institutional reforms.

Nowotny "Hilsenraths" EUR, Futures By Reviving Doomed "Red Herring" Discussion Of ESM Banking LicenseZH

Euro zone facing autumn crunch?MacroScope / Reuters
Good roundup

How A Country Rationally Exits The EurozoneGonzalolira
Once the political decision to exit the EMU has been taken by a country’s leadership, this is what it has to do

Full text: Moody’s changes the EFSF’s Aaa rating outlook to negative Credit Writedowns
The change in the outlook on the EFSF’s (P)Aaa rating to negative follows the recent changes in rating outlooks announced by Moody’s on euro area sovereigns that are EFSF guarantors

France is a lot like Greecealphaville / FT
That is, if you ignore the difference in their government bond yields and just use debt-to-GDP projections made in a working paper from 2010

Two perspectives on the "French lion in the grass"Humble Student of the Markets
My inner investor says, wow that's terrible. France is an accident waiting to happen… My inner trader tells me that, under the current circumstances, French real interest rates are negative and the France is actually making a profit by running these deficits.

BizDaily: The final Greek chorus? (audio 16min) – BBC (mp3)
Filling a bucket with no bottom: we consider the fears of some German politicians that Greece and Spain are now unsaveable. When do the eurozone prophecies of doom become self-fulfilling? Also: if you can't buy it, grow it. How Greeks are going back to the land.

Press release Results of the July 2012 bank lending survey for the euro areaECB

Octopus: Read This Book to Understand Wall StreetRolling Stone
Octopus is an incredible dark comedy with one of the craziest true-life ironic twists you can possibly imagine. But this incredible plot twist is not the reason this is an important book that should be read by everyone who wants to know how Wall Street works.

Strategic Briefing: Is The Fed Set To Roll Out QE3?The Capital Spectator

Mitä euroalueella tulisi tehdä?Osmo Soininvaara

Kuka saa maksaakseen kriisin loppulaskun?IS Pääkirjoitus
Kreikka nousi tarkastajien Ateenan-matkan vuoksi uudestaan tikun nenään eurokriisissä, vaikka kohtalokkaampi tapaus voi kokonsa vuoksi olla Espanja.