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Tuesday, September 11

11th Sep - EU Open: ESM ruling delayed?

All about two things: the Fed’s possible QE and the ESM decision. So what if the ESM ruling is delayed – it is still expected to pass - unless there is something else, like a need to use the ESM in ways that are not exactly kosher.

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Previously on MoreLiver’s:

All the coverage on ECB’s decision is in my ECB Watch-post (continuously updated).

News roundup – Between The Hedges
The 6am Cut London – alphaville / FT
Emerging Markets Headlines – beyondbrics / FT

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

Asia today: Waiting for Wednesday. Currencies steady, stocks weakSaxo Bank
The mild risk-off mood that permeated through markets yesterday extended into today’s Asian session. We had a number of data points, but only one was first-tier but had little impact on the day’s activity.

Morning Briefing (Asia): Markets Await FOMC DecisionBNY Mellon
Despite growing doubts over the AUD, we understand those who believe it has more to give. But the CAD is the better option 

Market Preview: US trade balance on tapSaxo Bank

European markets are expected to open lower Tuesday ahead of the German Constitutional Court's ESM ruling tomorrow. Investors are also keeping an eye on the US trade balance due today and the Federal Reserve meeting scheduled for later this week.

Danske DailyDanske Bank (pdf)
ECB’s Jorg Asmussen gives what could turn out to be a very interesting speech about “Stability guardians and crisis managers: central banking in the crisis and beyond” at the Institute for Monetary and Financial Stability of Goethe Universität  in Frankfurt. Markets will be sensitive to signals about the outcome of the Karlsruhe court ruling on ESM tomorrow and the likelihood Fed QE3 on Thursday.

Morning Briefing (EU/US): Distant horizons BNY Mellon 
The ECB bond buying program is a step in the right direction, nothing more

AamukatsausNordea (pdf)
Saksan perustuslakituomioistuimen päätös ESM:stä voi viivästyä * EKP:n valtionlainojen osto-ohjelma paransi sijoittajien luottamusta talouteen * LME-indeksi uusiin 4 kk huippuihin metallimarkkinoiden vahvan vireen myötä 

AamukatsausTapiola (pdf)
Osakemarkkinalla eilisen päätteeksi laskurekyyli, kun uutiset Kreikasta ja Espanjasta saivat markkinat epävarmoiksi. Tikkurilalta (TOP-5) aamulla positiivinen tulosvaroitus. Yrityslainoissa korkoriski nousussa: korkeamman riskin HY-lainat edelleen mielenkiintoisia. Ulkomaalaisomistusten muutokset – riskiä ostettu hieman elokuussa: Myyntiputkessa: Amer Sports, Neste Oil, Nokia. Ostoputkessa: UPM-Kymmene.

Democracy loses in struggle to save euroGideon Rachman / FT
By promising “unlimited” purchases of sovereign bonds, Mario Draghi, the ECB’s president, may have kept his pledge to do “whatever it takes” to save the euro. But in rescuing the currency, Mr Draghi’s magic bullet has badly wounded something even more important – democracy in Europe.

Europe’s pre-Eurozone debt crisis: Faroe Islands in the 1990s
The current EZ crisis is not Europe’s first sovereign- debt crisis. This column shows parallels can be drawn from an all-but-forgotten episode, i.e. the 1990 Faroese crisis. Just like Greece, the Faroes got into difficulty because of excess borrowing facilitated by a currency union with an AAA-rated partner undeterred as the sovereign debt spiralled upwards. In the Faroese case, the crisis was eventually resolved when political necessities outweighed the cost of the bailout.

Do You Believe In P/E Miracles?ZH
2012 S&P500 rise driven by multiple expansion, not earnings

Is US economic growth over?Robert J. Gordon /
Global growth is slowing – especially in advanced-technology economies. This column argues that regardless of cyclical trends, long term economic growth may grind to a halt. Two and a half centuries of rising per-capita incomes could well turn out to be a unique episode in human history.

Nick Colas, ConvergEx: Retail Investors And Financial LiteracyZH
Investors, Nostalgic For Logical Markets, Boycott New Centrally-Planned Normal

UBS Asia: is the miracle overZH
After two decades of unparalleled economic success, we believe China now needs a reform programme on a scale similar to that adopted 30 years ago. Without it, a heavily investment-centric and credit-intensive economic model could soon become unstable, and later stall in a middle income trap. (full 29-page document  download)

China’s Xi Vanishes; Where is the Man Rumored to Lead China Next Month? China Having Second Thoughts? What's the Worst That Could Happen?Mish’s
A regime change in China is slated for next month. Yet Xi Jinping, the man rumored to be the next leader is missing in action. It is not uncommon for Chinese leaders to disappear from public life for extended periods, but it is uncommon for them to disappear smack in front of a regime change.

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