MoreLiver's Daily: 8th Jan

The ECB is likely to leave interest rates on hold for a sixth straight month on Thursday, amid tentative signs that the euro zone's battered economy is bottoming out although some economists don't rule out a rate cut at some point in the first quarter of the year.

EU austerians rely on US stimulus to bail them out of recession – EconoMonitor

The EU austerians’ hope is that our economy will act like such a powerful tow truck that it will be able to overcome the “fiscal drag” of austerity on the Eurozone’s economy. This is a significantly insane idea – why shouldn’t the Eurozone stop hitching itself to the garbage truck of austerity that is pulling its economy down into the dump?

ESM Raises Near €2 Billion in First Debt Sale as Japan Pledges Support – WSJ

The euro zone's long-term bailout fund took its first step into public debt markets Tuesday, selling €1.927 billion ($2.517 billion) of treasury bills shortly after Japan committed to remaining a key investor in the European financial rescue project.

Riksbank Rate Cut Looms As Euro Crisis Weighs – WSJ

Tax Fraud Investigation Opened Into French Minister Tasked With Battling Tax Fraud – ZH

Greek government finds it can’t have its mousakka and eat it – alphaville / FT

It’s not all gloom in Greece – Nordea

Greece is starting to see some light at the end of the tunnel, even though the country still has a long way to go.

UNITED STATES

Via Goldman Sachs: Q&A On The Debt Limit – ZH

Q#7 for 2013: What will happen with house prices in 2013? – Calculated Risk

All of these factors suggest further prices increases in 2013, but at a slower rate than in 2012.

Q#6 for 2013: What will happen with Monetary Policy and QE3? – Calculated Risk

I expect the FOMC will review their purchases at each meeting just like they used to review the Fed Funds rate. We might see some adjustments during the year, but currently I expect the Fed to purchase securities at about the same level all year.

'Inflation versus Price-Level Targeting in Practice' – Economist’s View

MACRO NUMBERS

November Consumer Credit Soars, Driven By Student And Car Loans – ZH

95% of all 2012 consumer debt funded by Uncle Sam

Consumers Take on More Debt – WSJ

U.S. consumers' overall borrowing expanded in November at a quicker pace than the previous month, led by bank loans and student borrowing.

ASIA

Japan Explores War Scenarios with China – The Diplomat

As Japan’s Liberal Democratic Party national defense task force announced on Jan. 8 that it would increase the nation’s defense budget by more than 100 billion yen ($1.15 billion), three of five scenarios explored by the defense ministry recently involve the Self-Defense Forces squaring off against the People’s Liberation Army (PLA).

What sub-6% Chinese growth will do to various assets – alphaville / FT

Moving targets and a lack of self-belief at the BoJ – alphaville / FT

BoJ plans to raise inflation target from 1 to 2% at Ja 21-22 meeting

Japan finally takes Bernanke-san’s advice – 10 years later – MacroScope / Reuters

OTHER

A guide to the liquidity coverage ratio, for whingers – alphaville / FT

more on the Basel changes for the truly interested ones.

IN FINNISH

Turha hallinto maksaa meille miljardeja – Olli Herrala / KL

Ytimet pöpelikössä? – Kalle Isokallio / IL

Barroso: eurokriisi päättyi – Henri Myllyniemi / US Puheenvuoro

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Tuesday, January 8

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