Daily Reading – Wednesday, July 13, 2011

The Big Picture: Market focusing on 1 sentence

The stock market has bounced subsequent to the minutes on this one sentence, “Some participants noted that if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate and if inflation returned to relatively low levels after the effects of recent transitory shocks dissipated, it would be appropriate to provide additional monetary policy accommodation.”

FT Alphaville: FOMC minutes from the June 21-22 meeting

These minutes weren’t as interesting as those from the previous meeting, which preceded the first Fed press conference.

But there were a few semi-notable bits, which we list below.

FT Alphaville: No, the ECB can’t prop up Italy

This is too big for the ECB. Too big, too dangerous, too much like monetisation of debt — even by the Bank’s collapsing standards. Possible? Yes. Sustainable? Not at all.

FT Alphaville: Italy… from a high yield perspective

The ‘Morning Flash’ from Evolution Securities’ Gary Jenkins of Evolution Securities is something of a must read at the moment.

On Monday, he drew our attention to the rise in Italian government bond yields and illustrated just how quickly things can get out of control – just before they sort of did.

Today, he asks what rating a high yield analyst would assign to Italy.

Aa2/AA-/A+ or something a little lower ?

FT Alphaville: Are USDA crop stats unreliable?

It’s almost like a scene from “Trading Places“, in which traders conspire to use and abuse the release of the US Department of Agriculture’s crop report.

FT Alphaville: A change in Pimco strategy?

Has Bill Gross ditched his “long-short-long position” on US Treasuries?

WSJ Market Beat: Swap Spreads Hit One-Year Peak

A main gauge of stress in the credit market shows increasing worries about counterparty risk as the eurozone debt troubles increasingly threaten to spill over into larger economies.

The Slope Of Hope: The Euro and the ES

It wasn’t that long ago that I didn’t ever look at the FOREX markets. These days, I’m practically obsessed with them. They are, more than anything else, the driving force behind what moves equities.

Pragmatic Capitalism: Who bought all those bonds?

Well, today we got the first bond auction since the end of QE2. And what happened? It was as strong as ever.

Pragmatic Capitalism: The economic debacle in 4 simple charts

Green shoots have turned out to be yellow weeds. The SF Fed has an excellent new piece of research summarizing just how extraordinarily odd this recession has been. In a rather succinct piece, they show just how below trend the “recovery” has been and just how damaging it has been to the US household…

The Money Illusion: A million millionaires

According to a study reported in the Financial Times, more than 15% of Singapore households are millionaires. No other country comes close (#2 Switzerland has less than 10% millionaires.)

Wired: Kinect Hackers Are Changing the Future of Robotics

For 25 years, the field of robotics has been bedeviled by a fundamental problem: If a robot is to move through the world, it needs to be able to create a map of its environment and understand its place within it.

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