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| The ECB's losses from bond purchases €30b |
Howdy-ho, a new week, the first proper week of the year. Previously posted Best of The Week and Weekender. If I would read only two posts from my blog every week, these would be them.
I will later update the Calendar and an evening post is due later. You can follow me on Twitter and Facebook and email me for suggestions and requests.
I will later update the Calendar and an evening post is due later. You can follow me on Twitter and Facebook and email me for suggestions and requests.
To the links:
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| From Macronomic's post I linked to earlier. |
News 9-Jan morning – BTH
News 9-Jan – The Trader
News 9-Jan – The Trader
Daily 9-Jan – Danske (pdf)
Morning 9-Jan – Saxo
Morning 9-Jan – BNY Mellon
FX option vols – Saxo
Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
EURO CRISIS
There will be shocks – Free exchange / The Economist
IMF chief economist Olivier Blanchard offered some reason to be cautious in asking too much of fiscal policy. He agreed that big current-account deficits could be dangerous but pointed out that fiscal policy simply wasn't up to the challenge of controlling typical flows.
Beyond fiscal federalism: What does it take to save to euro? – voxeu.org
High debt levels, house price booms, uncompetitive labour markets – the list of possible reasons why some European countries are facing the wrath of the market are many. This column argues that they all boil down to one measure – inflation. Using the inflation differentials as a guide is the first step to seeing what countries need to adjust – and by how much.
UBS' Releases Most Dire Prediction To Date: Greece To Experience "Coercive" Restructuring With CDS Triggering Around March – ZH
From Here To Eternity, Hungarian Style – A Fistful of Euros
Leaving aside the long list of recent grievances, it was Hungary who decided to walk away from the IMF in the first place, suggesting it could manage quite well on its own, thank you very much, so the Washington based lender is now hardly likely to welcome the country back as some sort of long lost prodigal son.
Complexity Fetishism, the Euro Crisis and a worthy challenge for 2012: Part A – Yanis Varoufakis
Four-part econo-philosophical rant, first part.
US (UN)EMPLOYMENT
The US employment report was strong, but less strong than headlines and expectations had moved after yesterday’s ADP blowout. What do we focus on now after the anti-climax?
"Structurally impaired" sector job losses delay return to peak until 2015 – Sober Look
The structurally impaired sector jobs created during the period of over-capacity growth simply never returned. The sectors were highly credit dependent and with all the deleveraging taking place, the jobs are not likely to come back any time soon
We Added 1.6 Million Jobs in 2011— Where Did They Come From? – The Atlantic
It's part of an evolving split in the American workforce: On the one hand, we're growing high-skilled jobs in offices and hospitals. On the other, we're producing low-wage service jobs. There's not a ton growing in the middle.
Fundamental and Mathematical Case for Structurally High Unemployment for a Decade; Shrinking Job Opportunities and the Jobs Gap; The Real Employment Situation – Mish’s
To return to long-term trend of employment by 2020, 250k jobs are needed each month. During dot com peaks 264k and real estate bubble 91k-173 jobs were created.
December Unemployment Data: There Is Less Than Meets The Eye – The Daily Capitalist
I believe much of what we are presently seeing is mostly growth related to monetary and fiscal stimulus which is counterproductive to a real recovery. With such stimulus, the effect will fade when the money runs out and we will be left with the negative effects: price distortions, capital consumption, and more malinvestment. Also, we have the impacts of much of the world heading into recession.
US MACRO
Bank Of America On US Decoupling: Enjoy It While It Lasts – ZH
Historically, economic activity in Europe lags the US by roughly 2 to 3 quarters… However, this cycle should be different. This time the shock is not global or US in origin, it is coming from Europe. Hence, it should take time first for Europe to slide into recession and then for the US economy to contract. We expect the consensus to ultimately come around to our second-half growth view for the US economy.
Historically, economic activity in Europe lags the US by roughly 2 to 3 quarters… However, this cycle should be different. This time the shock is not global or US in origin, it is coming from Europe. Hence, it should take time first for Europe to slide into recession and then for the US economy to contract. We expect the consensus to ultimately come around to our second-half growth view for the US economy.
QE3 or Not? – Tim Duy’s Fed Watch
I increasingly think it depends on what the Fed's ultimate objective is - to unwind the Great Recession and attempt to restore pre-recession employment to population ratios, or just manage along a new output path. I used to think the former was the Fed's objective, but now am questioning that belief.
The zero lower bound in our minds – Free exchange / The Economist
Why is Mr Hall—why are so many economists—willing to conclude that the Fed is helpless rather than just excessively cautious? I don't get it; it seems to me that very smart economists have all but concluded that the Fed's unwillingness to allow inflation to rise is the primary cause of sustained, high unemployment.
MIDDLE EAST
SocGen Lays It Out: "EU Iran Embargo: Brent $125-150. Straits Of Hormuz Shut: $150-200" – ZH
Presenting An Iran Attack Probability Timetable And A Complete Geopolitical Outlook For The Middle East – ZH
American, British, Israeli and Iranian Warships Sailing Towards Confrontation – Washington’s Blog
Iran Starts Uranium Enrichment at Fordo; Joint Chiefs of Staff says Iran Has Ability to Block Strait of Hormuz; United Arab Emirates Bypass Oil Pipeline Delayed – Mish’s
Russia, Iran Proceed With Bilateral Trade, Drop Dollar; Russian Warships Park In Syria; Iran Accelerates Nuclear Enrichment – ZH
If the US was attacked by a criminal empire: an analogy to confront US-Iran history – Washington’s Blog
In 1953, the CIA (China Intelligence Agency) overthrew the Eisenhower administration, installing a vicious dictator, Dick Tator, who lorded over us until we deposed him in 1979…
OTHER
2012 – The Year of Living Dangerously – Washington’s Blog
Long post, topics: Debt – On the Road to Serfdom · Civic Decay – Occupying, Plundering, Capturing · Global Disorder – War, Oil, Religion
IMF Economist: Leverage and Collateral Churning May be Good Things – allaboutalpha
A recent working paper produced by IMF economist Manmohan Singh, “Velocity of Pledged Collateral: Analysis and Implications,” expresses concern about a “significant decline in the source collateral for the large dealers that specialize in intermediating pledgeable collateral.”
2012: A Year of Choices – John Mauldin / The Big Picture
The problem is that there is another type of path, one that we cannot retrace. After we choose that sort of path, the way back is blocked, and we must go on dealing with the consequences of our chosen path. We may come to forks in the road and vary our directions on the path, but we can’t turn back, no matter how much we would like to. We can choose other paths into the future, but the past will always be there.
In praise of things that are always what you think they are – Deus Ex Macchiato
A major cause of systemic risk in the financial system is things that are mostly one thing, but occasionally another.
The Making Of China's Epic Hard Landing – Dee Woo / ZH
Right now the outlook for Chinese economy is looking rather confusing: should it continue the painful structural adjustment to burst the economic bubble built up after so many years of high growth? Alternatively, should it adopts the expansionary policy to reinvigorate the flagging economy? Either way China is approaching dangerously close to an epic hard landing.
Right now the outlook for Chinese economy is looking rather confusing: should it continue the painful structural adjustment to burst the economic bubble built up after so many years of high growth? Alternatively, should it adopts the expansionary policy to reinvigorate the flagging economy? Either way China is approaching dangerously close to an epic hard landing.
Things I've Learned After 15 Years Of Trading – The Impatient Trader
The usual ‘don’t fight the trend’ etc, but still very good.
Distilling alpha with factor betas – Humble Student of the Markets
A couple months ago, we were approached by an experienced bond portfolio manager with an idea for a bond strategy for the Canadian market.
A Curated Linkfest For The Smartest People On The Web – Simoleon Sense