15th Sep Late - Swap lines are now open, order now

Summary: USD swap lines extended, consensus view seems to be this is just kicking the can and you should sell on news, rogue trader at UBS ($2b, ETF). In Europe the duopoly of Germany and France have told everyone how Greece is part of Europe, like we didn’t know that already. Later "extra" post coming on the USB, as it is just crisis porn and more suitable for late-night viewing. And follow me on Twitter or email me.

Views: The next tranche to Greece will be paid out, just after the pesky Finns fall into breaking their election-winning promise of “no new bailouts without collateral”. After that, a week, maybe two, and the Greece fails.

EURO CRISIS:

** Greece will stay but with new cap structure – The Big Picture

“The EU needs more than a financial solution to a financial problem. To restore credit, it needs to restore belief -- not only in the EU as a project, but in the competence and quiet efficiency of European political institutions.”

** Europe’s Credit Crisis Is Also an Identity Crisis: John Bruton – View / BB

** European Bank Blowups Hidden With Shell Games: Jonathan Weil – View / BB

So-called six-pack legislation is done. Someone breaking fiscal rules, two warnings first and then 0.1%/GDP fine or max 0.2%/GDP fine if statistics are also falsified. Too little and too late, but I guess better than nothing.

Deal reached on EU economic governance laws – euobserver.com

Markets Fall for Franco-German Fairytale – The Source / WSJ

Greek FINMIN Extends Time Of Offer to Reach 90% Participation - Though Assumes Success – Zero Hedge

GLOBAL LIQUIDITY BAILOUT

First the facts:

With BoE, ECB and Fed announcements, links to documents etc.

The Global Liquidity Bailout Arrives: World Central Banks Announce Global Dollar Shortfall Funding Resolution – Zero Hedge

Same as above but shorter

Dollar funding — central banks intervene – alphaville / FT

Then the views:

You just have to read this

** What Euro Dollar funding crisis? – Macro Man

Peter Tchir of TF Market Advisors: prerequisite for the Greek default, CDS spreads possible next intervention target, markets still not pricing risk fully because of hyperactive interventions

Here Is What Just Happaned – Zero Hedge

“The move shouldn’t come as any surprise as we’ve become so accustomed to every pinch in liquidity to be relieved by the worlds’ central banks. It’s extend and pretend, kicking the can, etc.” The dollars still have to be paid back.

** Major central banks to conduct USD liquidity operations – tradingfloor.com

Bruce Krasting says the swap deal has been in the works for a while, and many people have been involved in it. That is why euro was up and gold was down before the news. He suggests selling on the news.

** On the swap – Zero Hedge

Facilities for USD funding at central banks already in place, so why the expanded them? Maybe because things are worse than the markets currently believe?

Fed, ECB, BOJ and SNB Coordinate To Provide US Dollar Liquidity – Also Sprach Analyst

OTHER

** SNB: There is no inflation risk! – alphaville / FT

** The SNB Is Fighting a Phony War – The Source / WSJ

Hong Kong: calling the end of the peg – beyondbrics / FT

Vols, Risk Reversals & Pin Risk: 15 Sep 1230 GMT – tradingfloor.com

Interesting working paper – governments provide free puts, offer liquidity, pay for projects, support home ownership etc.

(pdf) Governments as shadow banks – the looming threat to financial stability – FED

“observation suggests that sources of asymmetry in carry trades and in government bond returns can be fundamentally different.”

(pdf) How much asymmetry is there in bond returns and exchange rates? – Dallas FED

DIVERSION

** Austere Italy? Check the Traffic – NYT

“Categorization is a useful shortcut but reveals biases. And it plays a role in everything from ethnic violence to childhood development.”

Putting people and things into categories – Farnam Street

What if the Secret to Success Is Failure? – NYT

What next for Apple? – Ultimi Barbarorum