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Monday, January 7

7th Jan - US Close: 1 trillion coin and Basel-easing

The focus is now clearly on US debt ceiling and possible solutions to it (the famous 1$trillion coin being one of them) and the news that the Basel rules have been eased - giving banks four more years to get things in order.

Previously on MoreLiver’s:                  

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Roundups and Commentary
Markets – Between The Hedges
The Closer – alphaville / FT

Commentary – TF Market Advisors
Tomorrow’s Tape: Earnings season gets started – WSJ
Morning Briefing (Asia) – BNY Mellon
US: Equities Stumble As VIX Term Structure Keeps Steepening – ZH

Reference
Debt crisis live – The Telegraph
The Euro Crisis Blog – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices
Economic Calendar – Forexpros

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EUROPE
Bank of England preview – Danske Bank (pdf)
No change in policy – but discussions on mandate

The EU speech Cameron should make – Hugo Dixon / Reuters
We have three main options: quit the EU; move to the edge as the euro zone pushes towards closer union; and seek to stay at the heart of Europe and influence its development in a way that promotes our interests.

Analysis: Angela Merkel, too powerful to fail? – euobserver
Merkel, the most powerful leader in the EU, seems set for another mandate after German general elections in autumn - if she can find a coalition partner.

Euro Crisis Risks Eliminated? – PragCap
It looks to me like we’re in a position where the governments on the periphery will continue to miss deficit targets and debt will remain extremely high, growth will stagnate and civil and political unrest remains the surest risk to causing an unraveling.

Euro’s ‘Draghi Put’ Could Be Coming to an End – Euro Crisis / WSJ

Draghi Seeks Extended Calm in 2013 on Fading Euro Economy – BB

Italian politics gets more messy – Nordea

Peripheral returns to the bond market are a bit like pornography – alphaville / FT
Ireland will soon tap — reopen for sale — its current five-year bond, its debt office said on Monday


UNITED STATES
Thoughts on the Budget Deficit – Calculated Risk

Question #8 for 2013: Will Housing inventory bottom in 2013? – Calculated Risk
Right now my guess is active inventory will bottom in 2013, probably in January.

  DEBT CEILING
Be Ready To Mint That Coin – Krugman / NYT
Choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.

America going platinum – Free exchange / The Economist
In a pinch, the coin should be wielded as a bargaining chip or outright solution. But America needs to face up to its institutional weaknesses and get serious about legislative reform or expect much more of this stumbling concentration of power in the White House to result.

Why we won’t mint a platinum coin – Felix Salmon / Reuters
So while #mintthecoin is an amusing intellectual exercise, no serious executive-branch politician should or will embrace it. Not unless he wanted to torpedo the international credibility of the United States just for the sake of some short-term political one-upmanship.

Bond market prices Fed out – but just wait ‘til the debt ceiling – MacroScope / Reuters

This is what would happen if we breach the debt ceiling – Wonkblog / WP

Mint the Platinum Coin? – Economist’s View

ASIA
China’s Economy: The Coming Year – WSJ
What’s the outlook for China’s growth in 2013? China Real Time asked economists to flip their best forecasting coin, then charted the results.

OTHER
Summary Of Key Events In The Coming Week – ZH

The Ten Charts Ignored By Bulls – ZH

BASEL RULES EASED
Banks Win an Easing of Rules on Assets – NYT
A group of top regulators and central bankers on Sunday gave banks around the world more time to meet new rules

Banks, Here’s your new liquidity regime. Now stop blaming us. Love, Basel – alphaville / FT
The complete set of changes is on the BIS website, but here are some highlights.

Will bank lending finally start to rise? – MacroScope / Reuters
Banks, in Europe at least, have also insisted that lending has remained low because there isn’t the demand for credit from business and households. If that’s true, increased willingness to lend might not be snapped up.