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Sunday, August 26

26th Aug - Weekender: EU, US, Asia

Europe, USA and China article links. ECB’s delay and troubles in practically all the member nations seem to be the most pressing issues in Europe, while in US the Fed’s wait-and-see and the fiscal cliff are the main items.

Earlier on MoreLiver’s:

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Last Man Standing Means Europe Investment Banks Resist CutsBB
Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit.

Germany's competing visions of Europeeuobserver
Germany is not the only EU country where there seems to be a slight disconnect between the main political parties and frustrated voters. But it is almost alone in not having a plausible eurosceptic party.

Germany May Ask Greece To Exit The Euro 'Temporarily'BI, ASA
From MNI, citing unnamed "senior eurozone officials" as sources

Samaras visit marks 'new relations' with Germanyeuobserver
Greek leader Antonis Samaras has said talks on Friday with Angela Merkel marked the start of new relations between Athens and Berlin but the German chancellor remained characteristically cautious.

Who really benefits from the weak euro?Sober Look
The Eurozone nations are impacted quite differently by the fluctuations in the euro. Ireland benefits the most from the weaker euro - far more than Germany as a percentage of its GDP.

Dutch set to defy austerity as left takes poll leadeuobserver
The left-wing Socialist party is expected to seize the largest gains in September's Dutch elections, threatening to deprive German Chancellor Angela Merkel of one of her closest allies in response to the eurozone debt crisis.

The crash of the Dutch housing market reminds us of a much older market bubbleSober Look
With 80% of the Netherlands' GDP coming from exports, the nation is already highly exposed to global growth. This housing market decline could tip the Dutch economy into a recession (also Rabobank’s 20-page report)

The "revised" Eurozone chain of eventsSober Look
How many times have we seen this scenario play out? The Eurozone leadership declares that it has the ultimate solution that ends up failing at the implementation stage. This certainly feels like one of those situations. Here is the "revised" chain of Eurozone events

In ECB-time, “the coming weeks” might be more than 4alphaville / FT
Draghi may wait until Germany’s Constitutional Court rules on the legality of Europe’s permanent bailout fund before unveiling full details of his plan to buy government bonds, two central bank officials said. D’oh! With the court set to rule on Sept. 12, investors looking for Draghi to announce a definitive purchase program at his Sept. 6 press conference might be disappointed,

What Today's Real ECB News Really MeansZH
The “excuse” of the ruling on September 12 only has any substance to the extent that (b) is true – that work on the design of the plan is incomplete. The idea that work “is not complete” may also be a euphemism for the fact agreement on the contours of the policy is proving elusive.

When ECB bond-buying meets collateralalphaville / FT
Chart via Nomura’s rates strategists. It’s their version of what the plumbing of the European Central Bank’s rejigged bond purchases should look like

Interest Rate Caps vs. Bands: Can "Secret Sauce" Make a Difference?Mish’s
Neither bands nor caps will work in practice. However, if the upper range is high enough where genuine buyers would step in on their own accord, then a cap or a band could conceivably appear to work.

The Definitive QE3 Odds CalculatorZH
UBS: The primary determinant will be the upcoming August payroll report. The chart below ignores these other factors and offers up the odds of further easing in September based on the base case that Bernanke’s primary concern is the state of the US labor market. July’s 8.3% unemployment rate and payroll gain of 163k put current odds of further easing at 45%.

The FOMC Minutes & QE3The Big Picture

Why Goldman Refuses To Raise Its S&P 1250 Year End ForecastZH
Political realities and last year’s precedent suggest the potential that Congress fails to reach agreement in addressing the ‘fiscal cliff’ is greater than what most investors seem to believe based on our client conversations.

Boomers Are Breaking the DealJohn Mauldin / The Big Picture
The “deal” with previous older generations was that they would retire and move on, making way for the next generation. Boomers are breaking that deal.

China’s Slowdown May Be Worse Than Official Data SuggestFED / The Big Picture

Chinese central bank’s ability to ease monetary policy is constrained by outflowASA

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