Previously on MoreLiver’s
EUROPE
Will Germans Pick Up the Tab
for Deutsche Bank, Too? – View
/ BB
Deutsche Bank is too big to fail both in terms
of its direct involvement with the national economy and the potential knock-on
effect on confidence in German industry. But the bank can fail in the sense
that it could require future taxpayer assistance. To determine how likely this
is -- and the scale of potential losses at any bank -- you need to answer three
questions.
Buiter on good news, bad news – alphaville
/ FT
Good: ECB’s
OMT, ESM agreements, pro-Europe election results. Bad: banking union talks.
PIIGS.
Blogs review: OMT - Has the ECB
solved the Euro Crisis? – bruegel
Comprising of potentially unlimited purchases
of government bonds, it is the largest ECB intervention so far. In the
blogosphere, OMT is mainly evaluated as intended to prevent market panic from
pushing otherwise solvent governments into bad equilibria, insolvency due to
mounting interest payments. Criticism focuses on either conditionality
requiring more austerity, stopping growth or on conditionality being not fully
credible as OMT support cannot easily be withdrawn from non-compliant
countries.
The Greek budget shortfall gets
bigger – alphaville
/ FT
Apparently that Greek shortfall is even bigger
than the even bigger figure reported in the German press on Monday.
Bundesbank castigates IMF for
saving Europe – The
Telegraph
Germany's central bank has launched a
blistering attack on the IMF, accusing officials of spraying around money like
confetti and overstepping their legal mandate.
Europe Pushed by IMF’s Lagarde to Consider Greek Debt
Write-Off – BB
No money
until 2020 debt/GDP is below 120%.
Euro Zone Starts Talks Over
Centralized Budget
– WSJ
Euro-zone governments have begun discussions
about creating a central budget for the currency union aimed at smoothing over
some of the region's economic divergences, after Germany indicated support for the idea, European officials say.
A European fudge, now in
focus – alphaville
/ FT
The divisions over whether the ESM should
shoulder the burden of existing impaired bank assets is a serious one, and
could get worse.
European Commission's
irrational fear of sovereign CDS markets is politically motivated – Sober
Look
Txhe CDS markets often act as a "canary in
a coal mine", pointing to a specific credit weakness. CDS spreads provide
transparency, particularly when transparency is not readily available from
other less liquid markets. And many EU politicians and bureaucrats hate
transparency because it puts their governments' poor practices on display.
The end of the euro’s Indian
summer – The Economist
After a few sunny weeks, a political and
economic storm is battering the euro zone once again
Quo Vadis Europe? A Euro crisis
presentation – Nordea
(pdf)
EUR convertibility premium:
confidence trumps everything – Nordea
Disregard This Post – MoreLiver’s
Daily
Collection
of euro breakup- and exit analysis
Euro zone to boost bailout fund
firepower to 2 trillion euros – Reuters
Euro zone states are preparing to allow the
bloc's permanent bailout fund to leverage its capital in the same way as its
predecessor so it can reach a capacity of more than 2 trillion euros and rescue
big countries if necessary, Der Spiegel said on Sunday.
ESM Fund Plans ‘Prudent’
Investments, May Buy Bank Debt – BB
EUROPE: SPAIN
Why a Spanish Approach to the
ESM Will Help – PIIE
Viva España? Spain’s other crisis – alphaville
/ FT
There’s nothing like a financial crisis to
bring out a surge of nationalism. In Spain’s case the situation
is especially serious and seemingly getting worse. So much so that some argue
that the growing constitutional crisis could soon eclipse the country’s fiscal
problems. The two, you see, are very closely entwined.
Next Steps For Spain – ZH
nice
calendar from RanSquawk
In the picture: Is Spain unraveling? – The
World / FT
The political gulf opening up between Spain’s
growing separatist movement in the richest province Catalonia and the
government of Mariano Rajoy, backed by King Juan Carlos and the Spanish
military, has spooked the markets and provoked much debate in the press about
whether Spain can survive in its present form.
A Spanish shopping list – alphaville
/ FT
JPM and Nomura on Spain’s budget
Spain is in Trouble – naked
capitalism
What Spain Just Announced, And What Was Left Unsaid – ZH
BNP’s comments
USA
Paul Volcker on Greedy Bankers, the Ryan Plan, and the Fed – Newsweek
Paul Volcker on Greedy Bankers, the Ryan Plan, and the Fed – Newsweek
Legendary economist Paul Volcker speaks out on
what’s wrong with Wall Street today, the Ryan plan, and the Fed’s bold moves.
QE Infinity: Unintended
Consequences – John
Mauldin / The Big Picture
Back Ben Bernanke's QE3 with
a clothes peg on your nose – The
Telegraph
Monetarists from across the world can mostly
agree on one thing. The US Federal Reserve
caused the Great Recession.
ASIA
The Next Panic – The Atlantic
The Next Panic – The Atlantic
Europe’s crisis will be followed by a more
devastating one, likely beginning in Japan…For ordinary Japanese, public
promises about retirement benefits and price stability will be broken just as
their private savings collapse…Our financial systems appear to be returning to
their inherently unstable nature, which plagued the 19th and early 20th
centuries.
MARKETS
Ray Dalio on QE3, Gold, China, Europe, Economy & More (Interview) – market folly
Ray Dalio on QE3, Gold, China, Europe, Economy & More (Interview) – market folly
Why you have to be very lucky
to have average luck
– Aaron
Brown / Minyanville
Not time to get nervous (yet) – Humble
Student
Very nice
technical overview of the major stock markets.
G10 Weekly: When QE becomes
futile – Nordea
(pdf)
The risk is that QE, instead of supporting
aggregated demand, rather increases households´ propensity to save as real disposable
income starts to fall.
G10 Weekly: To reiterate, QE
will become futile
– Nordea
You could argue that things are different this time,
and I assure you we will take the other side of that bet. But let us go back to
the notion of positive market reaction. Is this a sure thing? We doubt so and
we have positioned ourselves accordingly. To us then, we estimate that the
market will be drawn back in line with the underlying macro.
ECONOMICS
Excessive Reserve Accumulation and International Trade Balances – PIIE
Excessive Reserve Accumulation and International Trade Balances – PIIE
The doomsday cycle turns:
Who’s next? – voxeu.org
Simon
Johnson, Peter Boone: Industrialised
countries today face serious risks – for their financial sectors, for their
public finances, and for their growth prospects. This column explains how,
through our financial systems, we have created enormous, complex financial
structures that can inflict tragic consequences with failure and yet are
inherently difficult to regulate and control. It explains how this has happened
and why there are more and worse crises to come.
60-Second Adventures in
Economics – Farnam
Street
If you want to learn about economics, these
videos are for you.
Policy: the biggest unknown
to the global economy
– ASA
There is a fine but important distinction between
what ought to be done and what is likely to happen (which is often confused by
economists), and we are largely more interested in the latter and its
consequence.
REGULATION
A Rare Look at Why the
Government Won't Fight
Wall Street – Rolling
Stone
The great mystery story in American politics
these days is why, over the course of two presidential administrations (one
from each party), there’s been no serious federal criminal investigation of
Wall Street during a period of what appears to be epic corruption. People on
the outside have speculated and come up with dozens of possible reasons, some
plausible, some tending toward the conspiratorial – but there have been very
few who've come at the issue from the inside.
Bank Supervision: Bye Bye Basel? – EconoMonitor
So why this call to “reset” Basel? The desire for a
new, simpler, bullet-proof regulation may just a way to make up for the
weaknesses of supervision, which were the true trigger behind the latest
financial crisis (as shown by the fact that EU member states – having the same
rules in place – were very unevenly
affected).
Do bailed-out banks remain
bad, while good banks behave better? – alphaville
/ FT
The trauma and cost of a public rescue must
surely teach the bank management concerned to behave in a more prudent manner,
right? Wrong, according to a recent Bank of International Settlements paper.
A Lonely Redemption – NYT
He knows Wall Street’s heights. He helped hire Michael
R. Bloomberg, and he invested the money of two former Securities and Exchange
Commission chairmen, making a fortune in the 1980s. And he knows its depths,
since he pleaded guilty to stock manipulation in 1989, and was barred from the
Street.
IN FINNISH
EVA:n raportti: Kataisen hallitus vienyt Suomen
katastrofiin – Olli
Pusa / US Puheenvuoro
Pääkirjoitus: Missä ovat euron puolustajat? –
HS
tätä hirveää sontaa kommentoin aiemmin
Seitsemän seikkaa, joista pääjohtaja Liikanen vaikeni
– Jan
Hurri / TalSa
Suomen Pankin
pääjohtaja Erkki Liikanen kertoi eduskunnan talousvaliokunnalle, mitä EKP on
viime aikoina tehnyt ja suunnitellut tekevänsä ja miksi. Sen sijaan hän ei
kertonut, mitkä ovat EKP:n kokeellisen rahapolitiikan tahattomat ja haitalliset
sivuvaikutukset. Ainakin nämä seitsemän seikkaa Liikanen jätti kertomatta
Miksi emme pelastaneet
Lehmania? – Henri
Myllyniemi / US Puheenvuoro
Terveisiä Suomen Pankkiin – Juhani
Huopainen / US Puheenvuoro
nimettömänä
pysyttelevän ilmeisen hyvin kärryillä olevan tyypin terveisiä
Eurokriitikko Törnqvist: Mitä vikaa kansallisissa
valuutoissa on? – TalSa
Tie liittovaltioon on katettu harhaanjohtamisella ja
oudoilla päätelmillä – tyhmyri
Euron puolustaminen on
ilmeisesti kaiken negatiivisen makrodatan valossa muuttunut aika epätoivoisia
keinoja edellyttäväksi. Ensimmäinen noiden keinojen uhri näyttää olevan totuus.
EVA:n raportin sisältämä tapa esitellä asiat onkin lähinnä hyvää sotapropagandaa,
jossa musta muuttuu valkoiseksi ja valkoinen mustaksi.
EVM ja EKP saavat yhdessä auki rajattoman piikin
– Jan
Hurri / TalSa
Europäättäjien
laskutavalla yksi plus yksi voi olla paljon enemmän kuin kaksi. Jos yhteen
lasketaan EVM plus EKP, voi summa olla jopa rajaton. Yhdessä näillä on keinot
avata kriisimaille vaikka rajaton rahapiikki – ilman yhdenkään sopimuksen
avaamista. Tämän on Suomenkin eduskunta hyväksynyt.
Kreikan
Vauvanaskeleet – Juhani
Huopainen / US Puheenvuoro
Mitä Kreikan
ulosjoutumisen (tai pääsyn?) jälkeen tapahtuu?