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Wednesday, February 20

20th Feb - US Close: Fed's minutes burn

Previously on MoreLiver’s:

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

Tomorrow’s Tape: Home Sales, Consumer Prices, Wal-Mart Earnings – WSJ
US: Stocks Drop Most In 2013 As Gold Is Crucified On The Death Cross – ZH
Morning Briefing (Asia): Markets React Negatively to FOMC Minutes – BNY Mellon
  Policy makers show little sign of stopping doing whatever it is they have or have not been doing

EU deal on eurozone rules after MEPs concede defeat on debt fundeuobserver
EU lawmakers have reached a deal on tightening the eurozone's economic governance rules after MEPs conceded defeat on the swift creation of a fund to pool sovereign debt.

Deflating a Swedish bubbleDeus Ex Macchiato
Coming as it does on top of Switzerland’s use of a countercyclical buffer, and noises from Australia on measures to deflate the housing bubble there, this is interesting. We are starting to see countercyclical regulatory policy in action.

Basel III: Europe’s Interest Is to ComplyPIIE
On February 14, European Commissioner Michel Barnier and Federal Reserve Governor Daniel Tarullo both indicated their agreement to quickly give the Basel III accord binding force over, respectively, European and American banks. This is welcome. But even more important than the speed of adoption is that implementation should stay true to what the accord stipulates.

On the road to the euroIQ The Economist / presseurop
On January 1, 2014, Latvia will become the 18th country in Europe to use the single currency. It is a decision most Latvians would not have made, and it comes with significant risks.

The odd coupleButtonwood’s / The Economist
Although the yen has captured most of the currency headlines since the start of the year, sterling has been almost as weak.

Italy’s Politicians Face the Pinocchio TestWSJ
With just days to go before Italians head to the polling booths, it’s time to review how the main candidates's claims stack up.

Whoever wins this week’s Italian elections, it is unlikely that they will put an end to the ‘telecracy’ begun by Silvio Berlusconi.europp / LSE

Italy risks split Senate after election – graphic of the dayThomson Reuters
Italy is governed by two houses with equal lawmaking power. The Chamber of Deputies is controlled by whichever group gets the majority nationally. The Senate is decided by region, with 55% of each region’s seats awarded to the biggest party there. In four large regions, the battle between center-left and center-right coalitions is too close to call.

Italy's North-South Divide, And Lombardia's Starring Role In The ElectionsZH

Fed stimulus benefits still outweigh risks, Lockhart tells Reuters MacroScope / Reuters
The Federal Reserve is cognizant of the potential costs of its unconventional policies, but the economic benefits from asset purchases are still far greater than the potential costs, Atlanta Fed President Dennis Lockhart told Reuters

The fallacy of Fed ‘profits’ (and ‘losses’)MacroScope / Reuters

Hawkish Rumblings Getting LouderZH

Dollar Extends Gains on FOMC Decision, but Key is BYDMarc to Market

Message muddied alphaville / FT

Divergent views on QEDanske Bank (pdf)

"Several participants" support varying QE asset purchasesCalculated Risk
My read is the FOMC is modestly more optimistic on the economic outlook, and are prepared to vary the amount of QE asset purchases based on incoming data…Changes in the size of asset purchases will be something to watch at each FOMC meeting.

Fed may need to halt QE3 before jobs market heals: minutesReuters
A number of Federal Reserve officials think the central bank may have to slow or stop buying bonds before seeing the pickup in hiring the bold program is designed to deliver, according to minutes of the central bank's January policy meeting.

Lots of talk on bond-buying, no firm conclusions on what's nextWonkblog / WP

Fed Officials Feared Easy Money Could Rattle Markets WSJ

S&P 500 Falls Most Since November as Minutes Show DebateBB
Wall Street slides as Fed minutes spark concernReuters

Scrambling for ReturnsJohn Mauldin / The Big Picture

Economic and Market Outlook: Punch bowl not going anywhere yetNordea (pdf)
Risk sentiment has continued to mostly thrive lately. Improving economic data and continued easy monetary policy should still to provide support, but an increasing amount of event risk and uncertainty in the near future should lead to temporary profit taking and a correction lower in equity prices. (summary)

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