MoreLiver's Daily: 2013

Tuesday, December 31

31st Dec - 2014 preview

I will update this post when new stuff comes along.

23rd Dec - Quiet ahead of holidays

22nd Dec - Weekender: Off-Topic

I am experimenting with covering blog debates.

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

21st Dec - Epic Split

Here are the ”best” from my posts of the ending week. Last week’s edition here.

Key issues:

Europe managed to agree on the second pillar of the banking union: who and how manages what to do with the failed banks, and more importantly, who pays for them. The deal is deemed to be complex, limited in scale and scope and thus ineffective.

In US, the Federal Reserve announced it will begin tapering its monthly asset purchases in January. Market reactions were muted, meaning that this time around the Fed had managed to guide the expectations and provide softer forward guidance in exchange.

Many institutions have published their monthly and annual reports, which take a look at the 2013 in review and try to preview the next year ahead. It looks like the current year is now over, with only limited “further reactions to taper” on the agenda. Time for holidays, then.

20th Dec - EZ's weak b-union, budget discipline

19th Dec - After Taper, EZ banking union and holidays

Maybe the euro zone’s real problem is that European economists are all either Keynesians or Austrians (or should I say “Germans”?) Where are the European monetarists? And Market Monetarists? – Market Monetarist

The Post-Taper special post has been updated. The news of the day is the agreement on the banking union's second pillar - resolution mechanism. Not everyone is happy, and it has still to be ratified by the parliament.

18th Dec - EZ's b-union, German IFO, PIMCO monthlies

Schedule and vital links for December 18

19:00 GMT FOMC statement
19:30 GMT Bernanke press conference

Statement (19:00 GMT)

Economic projections (19:00 GMT, pdf)

Economic projections (19:00 GMT, html)

The Wall Street Journal’s Fed Statement Tracker
Previous statement (Oct 16)
Previous projection (Sep18, pdf)
Previous projection (Sep 18, html)

17th Dec - More Pre-Fed, EZ banking union

16th Dec - France bad, waiting for Fed

14th Dec - Weekender: Linkfest

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

13th Dec - Weekender: Best of the Week

Here are the ”best” from my posts of the ending week.

12th Dec - Bail-ins & Risky Sovereigns

11th Dec - US budget deal

10th Dec - Europe forming the resolution fund

9th Dec - Strong euro

8th Dec - Weekend links

7th Dec - Weekender: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

6th Dec - US employment surprises

5th Dec - ECB sits, payrolls next

Previously on MoreLiver’s:

Special: ECB Preview

Wednesday: ECB tomorrow, payrolls on Friday

---

Weekender: Best of the Week

Weekender: Weekly Support

Follow ‘MoreLiver’ on Twitter or Facebook

EUROPE

Europe repeating all the errors of Japan as deflation draws closer – The Telegraph

The whole eurozone must have a higher inflation rate to lift the South far enough above the deflation line to gain breathing room

What is Wrong with the EU? – F. Saraceno

Eurostat just released the 2012 figures for poverty and social exclusion in the EU. The numbers are terrifying.

Americanized Labor Policy Is Spreading in Europe – NYT

This is what is known in Europe as “internal devaluation.”

Euro zone likely to backstop banks with promises rather than cash – Reuters

A Reuters survey of euro zone backstops showed very few governments have any money earmarked for such a purpose. If called upon, they would have to prop up their lenders with bonds or guarantees rather than cash.

The German Scapegoat – Project Syndicate

Recent criticism of Germany's external surplus overlooks the fact that the country represents just the tip of a Teutonic iceberg: All northern European countries with a Germanic language are running a current-account surplus. Indeed, the Netherlands, Switzerland, Sweden, and Norway are all running larger surpluses relative to GDP.

Germany’s economy isn’t as strong as Europe believes – Marketwatch

Merkel will most likely preside over Germany in a “grand coalition” with opposition parties. But this time around she may have been handed a poisoned political chalice. Germany faces significant economic challenges and risks, and its economic power and financial strength may be overstated.

The ECB’s big moment – Bruegel

…and the gradually apparent risks and opportunities of bank supervision

BANK OF ENGLAND

The 8 things you need to know about the Autumn Statement – Money Supply / FT

BOE Keeps Rate at Record Low as Osborne Raises Forecasts – BB

UNITED STATES
The Volcker Rule: From Idea to Implementation (Almost) – WSJ

U.S. Regulators are expected to vote next week on a toughened version of the Volcker rule, a long-awaited provision of the Dodd-Frank financial law of 2010. The rule, named after former Federal Reserve Chairman Paul Volcker, is designed to make banks less risky by limiting its trading. Here is a look at the rule’s nearly five-year evolution from idea to reality.

Ahead of the Employment Report – Tim Duy’s Fed Watch

With the fiscal shutdown in the rear-view mirror, Fed officials are turning their attention back to policy normalization. They want to taper, but remain wary of pulling the trigger on tapering too quickly…one can make a reasonably solid argument for tapering if the November employment report adds to the recent string of 200k+ payroll gains. My expectation is that even a positive report will not trigger a taper with month; instead, the statement is most likely to evolve to reflect a new emphasis on forward guidance. But I can't rule out a tapering surprise.

Four Things to Know Before the Jobs Report – WSJ

The job market is picking up, but let’s not get carried away * It’s not just about jobs — it’s about how much those jobs pay * It’s the economy, stupid. * Fed, Fed, Fed.

MACRO NUMBERS

GDP Soars To 3.6% On Inventories; Consumption Contribution Lowest Since 2009 – ZH

Economists React: ‘No Momentum’ in GDP Report – WSJ

Markets Drop on Stronger GDP Print; Break Out Your Taper Meters – WSJ

GDP Q3 Second Estimate Rises to 3.6% - dshort

Inventory Hoarding Accounts For Nearly 60% Of GDP Increase In Past Year – ZH

The economy grew 3.6 percent last quarter. Put away the Champagne – WaPo

US third quarter GDP: ‘all hat and no cattle’ – Reuters

Upbeat U.S. data points to growth momentum – Reuters

Economy in U.S. Grows at 3.6% Rate on Bigger Inventories – BB

Initial Claims Tumble To 298K As BLS Warns Of "Holiday Volatility" – ZH

Real GDP Per Capita: Another Perspective on the Economy – dshort

Comments on Q3 GDP and Investment – Calculated Risk

ASIA

Leading Japan Economist Says Abe On Right Track, But BOJ a Risk – WSJ

OTHER

EMEA Weekly – Danske Bank

FINNISH

Irlannin kauppataseen sisällä elää kelttiläinen yllätys – Tyhmyri

Keksittyä palveluvientiä eli Irlanti vielä kaukana toipumisesta

Elvytys, setelirahoitus, talouskuri ja leikkausohjelmat - umpikujan monet nimet – Henri Myllyniemi / US

Tulossa yritysten julkinen verovelkarekisteri – Verkkouutiset

Kymmenen syytä, miksi AY-liikkeisiin ei kannata liittyä! – Matias Härkönen / US

Huomasitko, että Suomi muuttui? "Palkkaratkaisusta neuvotellaan ensisijaisesti yritystasolla" – TE

Katainen: Suomi ei lähde rikkomaan EU:n talouskuria – Verkkouutiset

Wednesday, December 4

4th Dec - Special: ECB Preview

Post will be updated after the event.

3rd Dec - Doubts linger ahead of numbers

2nd Dec - Upbeat PMIs, waiting for Thu/Fri

1st Dec - Credit Guest: All that glitters ain't gold

Here is this week's colossal contribution from Macronomics.

Here are the ”best” from my posts of the ending week. Last week’s edition here.

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

29th Nov - Special: Finnish austerity package

This post will be updated / päivitän tätä blogausta, uudet tulevat postauksen loppuun.

28th Nov - Thx a bunch, no free lunch

27th Nov - IMF no like EU, Germany solved

26th Nov - European dissent

26th Nov - Slow newsday

24th Nov - Credit Guest: In the doldrums

This week's credit cross-post from Macronomics, enjoy!

23rd Nov - Weekender: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

22nd Nov - Weekender: Best of the Week

Here are the ”best” from my posts of the ending week. Last week’s edition here.

21st Nov - Draghi denies neg. depo

20th Nov - Mixed data ahead of minutes

19th Nov - Slow day waiting data

18th Nov - Testing times

Looks like every major market from EURJPY to SPX is testing some sort of key technical level this week - add in the first November soft data (PMI) and the waiting of further instructions from the three central banks that are running the show, we could be in for a dull week.

Highlights of the week are the FOMC minutes on Wed and the European Markit PMIs on Thu.

16th Nov - Weekender: Linkfest

Here are the ”best” from my posts of the ending week.

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

15th Nov - Credit Guest: Squaring the Circle

A cross-post by Macronomics.

13th Nov - Deflation and the ECB

Tuesday, November 12

12th Nov - The German ECB and China's Plans

This is off-topic stuff on a recent political maneuver. Please disregard. This post will be updated.

11th Nov - Quiet start for an easy week

10th Nov - Weekender: Linkfest

9th Nov - Weekender: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

Best article links selected from the ending week’s posts. Last week’s edition here.

8th Nov - Payrolls are a positive surprise

7th Nov - ECB lowered, but markets recoup

ECB Preview and Post-Mortem! This post will be updated.

6th Nov - Europe sounds tight

5th Nov - Commission's fading optimism

4th Nov - Mon dieux Monday

3rd Nov - Weekend links

2nd Nov - Credit Guest: The Anna Karenina Principle

This week's cross-post from Macronomics.

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

1st Nov - Best of the Week

Best article links selected from the ending week’s posts. Last week’s edition here.

31st Oct - Terrible EZ inflation, unemployment

Now the US Treasury is telling Europe that Germany has been wrong. The numbers today from Europe confirm the view.

30th Oct - FOMC decision due

29th Oct - Waiting for the Fed

28th Oct - Monday's light links

27th Oct - Random Charts

Some random charts and comments.

26th Oct - Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

Best article links selected from the ending week’s posts. Last week’s edition here.

24th Oct - Draghi plays hard on banks

23rd Oct - European Banks Stressed

22nd Oct - Tapering pushed to Spring 2014

Some nasty articles on Europe today. Note that the Bundesbank is hawkish, but that is not news. Today's main event will be the delayed US September employment report.

The median analyst expectation is for payrolls to have risen by 180k after the 169k advance in August and 104k in July. The market reaction would likely be stronger to a downside surprise. – Nordea

21st Oct - The post-shutdown data calendar

German political news, ECB, asset quality review, delayed US data, PMI, IFO, next negotiations in US...

20th Oct - Credit Guest: The return of the Gibson paradox

Here is this week's I/O from Macronomics - your first line of defense against market ignorance.

19th Oct - Weekender: Linkfest

18th Oct - Weekender: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

Best article links selected from the ending week’s posts. Last week’s edition here.

17th Oct - Dollar offered as tapering is delayed

US: Debt deal done – or the need for one moved to February. Nice that the thing was solved for now, but not nice that the circus will be coming back to town so soon after the last show. Because it will be just the same in February. There are four Fed presidents speaking today, so the taper-guessing is back in vogue. January seen the earliest, but if the political mess continues and is not solved by that time, it might be that the Fed will simply decide to postpone the tapering again.

Dagong downgrades US from A to A-, says “A debt crisis evolves into a political crisis, which in turn exacerbates the debt crisis…Recurrence of the conflict over debt ceiling once again reveals the US superstructure’s incapacity to solve national debt crisis”

Bloomberg: The focus now shifts to a new series of deadlines -- the first for budget negotiations with a Dec. 13 target -- that set up more rounds of political combat over taxes and spending on programs including Social Security and Medicare. The deal funds the government at Republican-backed spending levels through Jan. 15, 2014, and suspends the debt limit through Feb. 7.

Europe: ECB’s meeting will discuss the asset quality review and the stress tests. We were promised a schedule and more information “in second half of October”, so perhaps we will hear something soon.

16th Oct - Deal in US?

There is much about the US fiscal melodrama that is a farce. Unlike other debt crisis, this one is totally self-inflicted. It is a crisis of choice not necessity. The misconstructions have been repeated so many times that they have taken on a life of their own. October 17 most certainly does not represent the deadline on a US default. – Marc to Market

15th Oct - Still no deal, Europe darkens

It now looks as if there will be a bi-partisan deal later today in the US Senate,

14th Oct - Another Shutdown Monday

Starting from today, I am posting only once per day. I will also skip the “regular” link section, but luckily you can access them from my Links-page.

I want to have more time to read what I link to – and write as well.

13th Oct - Credit Guest: The Rebel Yell

This week's cross-post by Macronomics, enjoy.

Some random charts for the Sunday - joitain käppyröitä iloksenne.

12th Oct - Off-Topic & Finnish

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

Best article links selected from the ending week’s posts.

11th Oct - US Open

10th Oct - US Close: A Shutdown-Pause?

9th Oct - US Close: Still playing chicken

Fed minutes contained no surprises - except that the FOMC really, really wants to taper - but is too scared of the feedback. More on Yellen, and some good ones on Europe. Of course, the U.S. shutdown continues, but no proper news yet.

It only takes a minute, girl!

8th Oct - US Close

IMF's WEO was discussed in the previous post. Today, again, the US shutdown and debt ceiling are on the agenda. But some very nice ones on Europe as well...

7th Oct - US Close

6th Oct - Weekender: Markets, Econ, Finnish

This week's 'World'-linkfest is heavy on the US shutdown and the approaching debt ceiling.

4th Oct - Weekender: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

3rd Oct - US Close

2nd Oct - US Open: ECB Presser, Italian Relief

Previews on today's ECB-meeting. I will update this post later.

1st Oct - US Close

30th Sep - US Close

The Italian government looks ready to fall. They just don't have the support they need. In Austria, the anti-euro agenda was a big winner, but not by enough - they will form a rainbow-government of all the parties except the anti-euro-parties, which will make the government weak and unfocused, just like in Finland and many other countries. But hey, anything for the euro!

US government shutdown probably happens after today. It will likely remain short, but markets might still make a big issue out of it.

28th Sep - Weekender: Econ, Markets, Off-topic, Finnish

The good old debate on austerity is still going strong. Monetary policy is also questioned as the move from quantitative easing toward forward guidance is a recent trend by the US and UK.

German election aftermath, the apparent backpedaling on the federal Europe and the looming US government shutdown are the main drivers right now. Italy's government looks like it could fall.

ECB's meeting next week will probably not do anything new, but might give further hints on a new LTRO, due later - if still needed at that point.

The Federal Reserve’s tapering is still featured heavily in articles, but will remain on hold probably until at least next December. Should the shutdown happen, even next Friday's unemployment report would perhaps not be published - effectively stopping the Fed from making informed decisions, and certainly pushing the tapering-date forward.

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

27th Sep - US Open

26th Sep - US Close

25th Sep - US Open: Washington's Fiscal Games

24th Sep - US Close

23rd Sep - US Close: Fed speakers

22nd Sep - Credit Guest: The last refuge of a scoundrel

Here is this week's credit cross-post from Macronomics.

21st Sep - Weekender: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

20th Sep - US Open

The latest ones are added to the end. Update 21-Sep 20:00 GMT.

17th Sep - US Open (having a break)

This will be my last post before a break until next weekend. Have a happy & safe FOMC!

16th Sep - US Open: Choose your poison

Things have gotten interesting. Larry is out of the race, German elections might be tighter than previously thought, FOMC is due soon with their tapering decision. And Europe is as it has been for many years - complacent.

An anonymous commentator in Finnish:

15th Sep - Credit Guest: The Cantillon Effects

This week's credit market summary - or should I say a tome of biblical proportions - from Macroeconomics.

14th Sep - Special: Financial Crisis Five Years

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

13th Aug - US Open

The best articles from the ending week. Some of them on Europe are classics. Last week’s ‘Best of’ here.

12th Sep - US Close

11th Sep - US Close

This post is updated as new material is published (latest ones at the top of the post)

10th Sep - US Close

9th Sep - US Close

This week's critical mass of credit talk from Macronomics:

Citi Credit Weekly Aug-2 2013:

…both Italian and Spanish government bonds’ haircut levels at the ECB are clinging on to the “AAA to A” category thanks only to a lone A rating (on negative outlook) from DBRS. Thanks to the ECB’s even more surprising recent increase in haircut levels for BBB governments, a one-notch downgrade from DBRS would result in a five-to-tenfold increase in margins payable.

In credit, we love it when banks go out and raise equity, but that is not always an option. If even Deutsche reckons the best way to cope is by shedding €300bn in assets (presumably with a bias to better-quality ones), what does that imply for the periphery?

7th Sep - Weekender: Off-topics & Finnish

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

6th Sep - Special: US Aug Employment Report

The best articles from the ending week. Some of them on Europe are classics. Last week’s ‘Best of’ here.

5th Sep - US Close

There is so much hope now riding on "modest recovery", "euro crisis contained by OMT and existing programmes" and "tapering" that it reminds me of the previous attempt higher. So two scenarios: 1) either we return to "normal times"-yield levels as all is well and Europe will become either a federal union or the PIIGS will turn into germanies - or 2) crisis makes a comeback and we will see something similar to the last time that "crisis was over".

One monetary policy for all the European nations without a fiscal union and common backstops?

I will update this post during and after the event. The usual: at 1145 GMT we get the decision, and 1230 GMT president Draghi reads the pre-written statement and answers questions from the press.

Click for a larger version. The red vertical lines are ECB meeting dates that have a press conference, the blue lines are FED meeting dates that have a press conference. In the past, the ECB dates have provided the EURUSD with volatility and direction. Let's see if this return from the holidays-meeting continues that tradition.

5th Sep - EU Open: BoE, ECB ahead

4th Aug - US Close

Previously on MoreLiver’s:

Wednesday US Open

Wednesday EU Open

Tuesday US Close

"For Political Reasons" - The inconvenient truth about the euro

Weekender: Weekly Support

Follow ‘MoreLiver’ on Twitter or Facebook

Roundups & Commentary

News – Between The Hedges

Markets – Between The Hedges

Recap – Global Macro Trading

Daily Risk Monitor – Global Macro Monitor

The Closer – alphaville / FT

US: McCain Sparks Stocks Best Day In A Month As Bonds Drops To 25 Month Low – ZH

EUROPE

Draghi Gets Another Chance to Push ECB’s Forward Guidance – WSJ

The value in vague – alphaville / FT

JP Morgan economist really would like the ECB chief to use the opportunity to expand upon the word “extended” when offering interest rate guidance.

Greece: Troika demands that Athens liquidate arms industry – presseurop

A third way forward for Europe – Presseurop

The intergovernmental method established by the Maastricht Treaty may well be insufficient to overcome divisions between member states, however, the much vaunted solution of radical federalism is even less viable. If a balance is to be restored, a compromise must be found.

UNITED STATES

Fed exit options, table du jour – alphaville / FT

Which part of future Fed tightening “is now completely up in the air”? The answer (according to Societe Generale) is in the useful table

It's the what, not the who – Free exchange / The Economist

Larry Summers will be the next chairman of the Federal Reserve. It is roughly as unclear as it has always been, which is very, what that will mean for monetary policy.

Worse Than Expected US Trade Deficit, Trade Gaps With China, EU Rise To Record – ZH

OTHER

Beware the EM central bank FX swap trend – alphaville / FT

If you’re an central bank in emerging markets, struggling to keep your economy stimulated/protected from hot money flows, using swaps or FX sales is a tempting and viable alternative to interest rate hikes. And generally speaking, the BNP EM strategists argue, swaps provide for a richer toolset for most central banks.

4th Sep - US Open

3rd Sep - US Close

2nd Sep - US "open": German elections

A lot of material, but the week is also an important one. Tin hats on.

1st Sep - Credit Guest: Misstra Know-it-all

Here is this week's cross-post from Macronomics, the sees-it-all eye on the sky.

"For Political Reasons" - The inconvenient truth about the euro

This essay is from the book Euro or Not?, which was published on June 5 in Helsinki, Finland, by the think tank Suomen Perusta. Authors of the book include current and previous members of the European Parliament, Finnish Parliament, a previous minister, economists and bloggers.

Suomen Perusta is operated by The Finns Party and the full document (in Finnish only) can be downloaded from the think tank’s website in PDF format – along with the previous publication How the euro area develops?.

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week's 'Support' here.

30th Aug - US Close

The best articles from the ending week. Plenty of Finnish articles. Last week’s ‘Best of’ here.

Themes of the week: Federal Reserve continues to excite people, now that the rot has spread to the emerging markets and all kinds of negative feedback loops are discussed. Syria and European bright data were also notable.

29th Aug - US Close

28th Aug - US Close

Sixten Korkmanista, kun oli taas telkkarissa: Korkmanin track on huono. 80-luvulla puolusti silloista raha- ja talouspolitiikkaa, 90-luvulla lamasta nousua pitkittänyttä eumutusta, rahaliittoon menoa jne. Vielä lokak. 2011 EVA:n raportissa kertoi, että:

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