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Thursday, September 13

13th Sep - US Close: Fed Up

So we got the QE, markets are happy: stocks up but near channel highs, EURUSD up but sitting below major 1.30 resistance, inflation expectations up. Next week back to Europe, plenty of issues still ahead. Given how certain markets were that QE is coming, perhaps the move to aggressively hit where it matters - mortgage bonds - was what caused the positive reaction. So somewhat more aggressive than what had been expected. 

After this "superweek, the next major driver will be Europe: there are plenty of open issues left on the table - and many of the solutions presented are vague. EDIT: I updated the US Open post.

Nothing comes to my desk that is perfectly solvable. Otherwise, someone else would have solved it. So you wind up dealing with probabilities. Any given decision you make you’ll wind up with a 30 to 40 percent chance that it isn’t going to work. You have to own that and feel comfortable with the way you made the decision. You can’t be paralyzed by the fact that it might not work out. On top of all of this, after you have made your decision, you need to feign total certainty about it. People being led do not want to think probabilistically. – Barack Obama

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Previously on MoreLiver’s:

Roundups and Commentary
Markets – Between The Hedges
The Closer – alphaville / FT

US Summary: Up – ZH
Tomorrow’s Tape – MarketBeat / WSJ
Morning Briefing (Asia): Between Scylla and Charybdis – BNY Mellon
  Greece's Democratic Left is losing support because of the company it keeps

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

BofAML: The ECB OMT: End game or (some) more trouble?ZH
The ECB has offered a seatbelt to a driver with a bad driving record, which will only work if the driver agrees to a strict monitoring of his driving. So, will the driver accept the offer in the first place? Will he change his behaviour afterwards? And if not in the latter case, is the threat of removing the seatbelt credible?

The OMT, and the plumbingalphaville / FT
Charts on a certain broken transmission mechanism are popping up everywhere.

The euro’s demise may be the final chapter of the ERM debacleThe Telegraph
The drama of 1992 showed why Germany cannot lead Europe out of a monetary crisis

Now politicians have no more excusesLa Repubblica / presseurop
The verdict of the German Constitutional Court has ended the first part of the 'war of the unification’ of Europe. Today, though, a new phase is opening up: the battle to convince national politicians to accept the surrender of sovereignty necessary for the EU of tomorrow.

PSI lostalphaville / FT
The Greek Debt Exchange: An Autopsy is a breezy tale of Greece’s success in restructuring the largest amount of sovereign debt in modern history, despite the broader failure of its bailout.

FOMC StatementCalculated Risk
QE3 $40 Billion per Month, Extend Guidance to mid-2015

Redacted Version of the September 2012 FOMC StatementThe Aleph Blog

QE3 is on!Wonkblog / WP

QE3 – A Brief Analysis PragCap

QE3 arrivesFelix Salmon / Reuters

The Fed Announces Additional Easing Economist’s View

FOMC Projections and Bernanke Press ConferenceCalculated Risk

Longer-term inflation expectations spike in reaction to the FedSober Look

QE3: Fed to buy bonds until the economy recoversNordea

Precious Metals Update - Part IThe Short Side of The Long

Fiddling at the FireNouriel Roubini / Project Syndicate
Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices. In autocracies like China and Russia, leaders resist the radical reforms that would reduce the power of entrenched lobbies and interests, thereby fueling social unrest as resentment against corruption and rent-seeking boils over into protest.

EMEA Weekly, Week 38Danske Bank (pdf)

Luottotappioiden huumaaHenri Myllyniemi / US Puheenvuoro

Huoli unionin tilastaMitro Repo / IL

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