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Wednesday, January 9

9th Jan - US Close

Quote of the Day: (in Finnish): Suomesta Saksa on hyötynyt muutama kymmenen miljardia. Hommahan meni niin, että Saksa myynyt PIIGS-maille tuotteitaan ja Saksan pankit rahoittaneet PIIGS-maiden ostot. Sitten paska lensi tuulettimeen. Tehtiin PIIGS-kusetukset, ERVVt, EVM:t, EKP-operaatiot, ja Saksan pankit ovat nyt kuivilla. Suomella 50 Mrd€:n lasku odottamassa. PIIGS-maista Saksalla oli nollasummapeli, mutta Suomelta sai muutama kymmenen miljardia koko EMU-alueen himmelin kautta lopulta. – ’noonez’

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

Tomorrow’s Tape: Jobless claims, ECB meeting – WSJ

Morning Briefing (Asia): Markets Await BOE and ECB Decisions – BNY Mellon
US: VIX Breaks Losing Streak As Everything Bought Except Apple – ZH

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

Some People Still Think Currency Unions Are a Good IdeaWSJ
You might have thought that the euro zone's struggle to avoid a catastrophic splintering over the last three years had pretty much ruled out any possibility that anyone would still consider currency unions to be a good idea, but you'd have been wrong.

In the euro area, it’s pretty much going to suck for awhilealphaville / FT
research from Goldman Sachs

The Eurozone’s Agenda in 2013Project Syndicate
EU leaders concluded 2012 with a landmark agreement that places all eurozone banks under a single supervisor. But they have clearly refused, at least for now, to hold a serious discussion about deeper integration, without which the euro crisis cannot be overcome.

What's Good For the Goose...?Tim Duy’s Fed Watch
German plans for further austerity indicate that fiscal policy remains a downside risk for the European economy.

Germany is not profiting from the eurozoneThe Guardian
The export boom may benefit German industry, but wages and living standards have stagnated and poverty is rising

Why Cyprus is ImportantMarc to Market
Amounts not determined, presidential elections in Feb, Troika in disagreement, political issues, euro exit risk.

Merkel Confronts Growing Skepticism on Bailout Aid to CyprusBB
Merkel warns Cyprus not to expect special treatmenteuobserver
German Chancellor Angela Merkel has warned Cyprus it should not expect special treatment when negotiating the terms of its bailout, which she suggested would not be concluded anytime soon.

Debt Crisis: A €1m gateway to EuropeDie Zeit / presseurop
Hard-hit by the crisis, Lisbon is wooing rich investors from its former colonies. Anyone who invests in the country has a good chance of obtaining a visa — and an open door to the rest of Europe.

Europe's Scariest HeatmapZH
Regional youth unemployment rates mapped out.

Ireland, a local (law) bond for foreign buyersalphaville / FT
…with the success of yesterday’s €2.5 billion syndicated bond sale, had eliminated the “funding cliff” presented by a €11.9 billion bond repayment due in mid January 2014.

Barbarous RelicsKrugman / NYT
If we have a crisis over the debt ceiling, it will be only because the Treasury department would rather see economic devastation than look silly for a couple of minutes.

A Look At The Fed's Nest In 2013: Here Are This Year's Voting Hawks And DovesZH

Q#4 for 2013: What will the unemployment rate be in December 2013?Calculated Risk
My guess is the participation rate will remain around 63.6% in 2013, and with sluggish employment growth, the unemployment rate will be in the mid-to-high 7% range in December 2013 (little changed from the current rate).

Q#5 for 2013: Will the inflation rate rise or fall in 2013?Calculated Risk
Given the Fed's tolerance for a little more inflation, we might see a little more inflation in 2013 than in 2012 - but I still expect inflation to be near the Fed's target. With high unemployment and low resource utilization, I don't see inflation as a threat in 2013.

Time for the great rotation?Buttonwood / The Economist
So while we may well see fund flows move in the direction of the equity market, it seems hard to believe we will see a massive asset reallocation. Pension funds, for example, are heading inexorably towards bond-heavy portfolios as their membership matures and they reduce risk and aim for income; the same approach will be followed by ageing savers all around the developed world. A mini-rotation is more likely.

Why Europeans and Americans Are Addicted to Budget BrinkmanshipPIIE
The common refrain echoing through American politics, especially from Republicans, is that the United States must avoid, at all costs, becoming another Europe. How ironic, then, that thanks to Republicans, American and European politics have come to rely on the same sort of budget, borrowing, and fiscal brinkmanship.

Passing the debt buck from the public to private sectorPictet
The December 2012 issue of Perspectives is now available for reading and downloading. Here is December’s topic of the month: as credit mechanisms have broken down, developed economies have been powerless since 2008 to return to potential rates of GDP growth. 2012 does seem to be closing on a more heartening note though: deleveraging in the private sector in the US looks to be over. The daunting challenge and big hope as the world moves into 2013 is to get credit flowing again. (or Zero Hedge’s summary)

Instituution kuolema – surumarssi suomalaisella laatujournalismilletyhmyri

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