19th Sep Late – Greek Advent, or Eve?

Summary: The Greek default is now a certainty. Only the timing and the possibility of getting the second bailout tranche are open questions. UBS rogue trader updated. Leave a comment, follow me on Twitter or email me. 

Today’s Headlines – Between The Hedges

FX options 19^th Sep 12:30 GMT

Vols, Risk Reversals & Pin Risk – tradingfloor.com

Credit market overview with good charts and comments

Credit Markets - Controlled demolition – Macronomics

EURO CRISIS

While the fiscal position of many countries was ok before crisis, end result was still fiscal trouble. Risks and sustainability are not captured by simple measures like budget deficits.

** Is the eurozone crisis a sovereign fiscal crisis? – Marginal Revolution

Required: credible solution to Europe’s debt crisis and recapitalization of banks

** German Banks Need Recapitalization of 127 Billion: Report - EconoMonitor

USD basis swap prices already back to levels before Thursday’s annoucement

Dollar funding costs rise as central banks’ plan seen inadequate – Pragmatic Capitalism

Is The ECB Losing Its Appetite For PIIGS Bonds Again? – ZH

Not BNP, so either SocGen or Credit Agricole.

The Corporate Bank Run Has Started: Siemens Pulls €500 Million From A French Bank, Redeposits Direct With ECB – ZH

Greece

No public announcements, decision on payment of next tranche moved to 3^rd Oct. Actually, there was an announcement that the talks went great and everything is ok, but nothing..

** Greece: Conference Call with EU and IMF has started – Calculated Risk

Default coming, two official denials: “never believe anything until it’s officially denied”

** Humiliated Greece Seeks to Avoid Humiliation and Blackmail; Bailout and Adjustment Fatigue by Germany and Greece – Mish’s

“100% chance of default”

** Preparing for a Greek Default – The Burning Platform

Nouriel Roubini, headline says it all.

Greece Should Default and Abandon the Euro  – EconoMonitor

Coup is a possibility, but not very probable.

Greece: Don’t Discount the Role of the Military – The Source / WSJ

19^th Sep speech on Greece

Remarks by Bob Traa, Senior IMF Resident Representative – IMF

FOMC

Markets are pricing in further easing, so policy scope is limited.

Fed Runs Risk of Doing Less Than Investors Expect – NYT

What’s a Fed to do on Wednesday? – Pragmatic Capitalism

Recent speech by Richard Fisher, President of Dallas Fed

(pdf) Of moose and men – BIS

OTHER

Show this to the cultists complaining how banks create money from thin air.

Fractional reserve banking – MacroMania

Video interview and transcribed text

Bridgewater's Ray Dalio on His Principles & Investment Outlook – Market Folly