Google Analytics

Tuesday, March 26

26th Mar - US Close: Europe's Levyathan

The Cyprus post has been updated. It looks like saving the banks via financial repression and ‘deposit levies’ i.e. confiscating deposits is becoming a major issue, and I will create a dedicated post for that…

Näyttää siltä, että kevään ykkösuutinen on pankkien pelastelu tallettajien varojen pöllimisellä. Väsäilen lähipäivinä Kyrpos-postia vastaavan "Levyathan"-postauksen, jota päivittelen tilanteen kehittyessä. Ja sitten Kypros. Ttarina alkaa osoittaa sammumisen merkkejä. 20%-bkt-rommaus, isompi kuin Suomessa, on edessä. Kannattaisi lähteä eurosta, mutta tuskin tajuavat. Saa nähdä - ehkä toi talletusten karkaaminen vetää tuonkin paskasaaren taas keskipisteeksi. Kukaan ei edes huomaa jonkun FED:n ukon höpinöitä, kun kaikki seuraa Eurooppaa.

Tulee Merkelille hauskat vaalit.

Previously on MoreLiver’s:

Follow ‘MoreLiver’ on Twitter or Facebook

Roundups & Commentary
Markets – Between The Hedges
NEW: Daily Interest Rate Monitor – Global Macro Monitor
The Closer – alphaville / FT

Tomorrow’s Tape: Pending Home Sales, Four Fed Speakers – WSJ
Europe: Bank Bonds Plunge To 5-Month Lows – ZH
US: Another Dow All-Time High But Bonds/Credit/Banks Ain't Buying It – ZH
Morning Briefing (Asia) – BNY Mellon

Dishonest Data, the Draghi EditionEconospeak
Germany has long repressed wages below productivity growth, with drastic effects on inequality as well as price-cutting.  In the distorted world of these statistics, “reform” means taking measures that will reduce labor’s share of the pie, as it has in Germany.

Change Comes (Slowly) to the Bank of EnglandPIIE
In the past couple weeks, there have been signals that change is coming to the forecasting and monetary policy process of the Bank of England—incremental change, but change nonetheless.

An Age-Old ProblemWSJ
As Europe grapples with its fiscal and banking crises, it's worth remembering that it faces what may be an even greater challenge: a rapidly aging population.

D'Estaing: eurozone should shut its doors after Polandeuobserver
Former French president Giscard d'Estaing has said the eurozone should stop enlarging after Poland joins.

The EU needs to speak the public's language, not austerity-speakeuobserver
Together with a long-standing attachment to politics by summit, the EU is fond of acronyms. How else can you describe a world inhabited by QMV, Coreper and co-decision, not to mention trialogues, comitology and the Luxembourg compromise?

Banks are back in focus... and that's bad newsTradingFloor
Steen Jakobsen: There is ample reason to believe that deposits will flow from Italian, Spanish and Portugese banks as the whole concept of a bail-in of all asset classes will leave investors no option but to go for more safe havens. That said, I think it will matter little as we will soon see a full European version that mirrors the Swedish Bank model, which was financed by levies on assets in all of Europe (or Euro zone).

Depositing some calm, at least for the little guysalphaville / FT
Chart from HSBC showing how many depositors fall within the bracket of the €100k guarantee mandated by EU law. Chart from JP Morgan’s F&L team shows percentages of insured and uninsured deposits in the eurozone (click to enlarge). Essentially, the share of large or uninsured deposits is likely to be close to half of total deposits.

The Cypriot banking crisis shows that Europeans have yet to work out the answer to the question, ‘who pays?’europp / LSE
The crisis is a direct result of an over-extended banking system: something that also affects other Eurozone members. The solution, to make bank depositors pay, could undermine confidence in the Eurozone’s banking system.

First Cyprus Hit the Euro, Now Euro-Zone Banks WillWSJ
Fade out the tax payer. Fade in the investor. Part two of the euro-zone debt crisis has just begun. And another period of euro uncertainty has probably started. It all has to do with Cyprus

Cyprus And The Eurozone Bank Bailout HypocrisyTestosterone Pit
Cyprus didn’t prick the Eurozone bailout bubble, the notion that bank investors who took enormous risks to gain financial rewards would always be made whole by taxpayers. That bubble had already been pricked in February. But it was the first time that the international bailout cabal, the Troika, stuck its needle into it—while Germany quietly bailed out all investors in one of its own rotten banks.

Deal with failed banks the Dutch way: rely on the ECB, deposit insurance, and the public’s faith in the governmentalphaville / FT
With the turn of events in Cyprus, it seems particularly relevant to note how in the case of SNS the Dutch government reaped the benefits of extraordinary support from the ECB, deposit insurance, and the public’s belief that the state will back the banks.

Bank of Spain sees economy shrinking further this yearReuters
Bank of Spain sees 1.5 percent contraction in 2013 * Government seen revising down own forecast of -0.5 percent * Deficit seen at 5.9 percent of GDP in 2014

Irish Government Faces Voters as Austerity BitesWSJ
Ireland’s government is becoming used to favorable reviews from its bailout lenders and bond investors, but Wednesday faces what is likely to be a tougher audience when its two coalition partners contest a by-election that will be a key test of its ability to hold on to power.

Fedspeak on Both Sides of the AtlanticTim Duy’s Fed Watch

New Home Sales at 411,000 SAAR in February – Calculated Risk
Real House Prices, Price-to-Rent Ratio, City Prices relative to 2000 – Calculated Risk
A few comments on New Home Sales – Calculated Risk
Durable Goods Orders Still Tracking Equities Closely – PragCap
Durable Goods Orders Rebound In February – Capital Spectator
March Consumer Confidence Plunges As New Home Sales, Richmond Fed Miss – ZH

Why ‘Shinzo Abe: The Sequel’ beats the originalThe World / FT

361 Capital Weekly Research BriefingThe Reformed Broker

Twilight of JusticeGolem XIV
This isn’t about lack of proof or the complexities of financial crimes or showing who knew or proving actual intent. It is not about proof or criminality at all. It is about there being a new category of  financial entity which our law makers and prosecutors have decided for us, is above the law. They are called  G-SIFIs, Globally, Systemically Important Financial Institutions or G-SIBs, Globally Systemically Important Banks.

Rakastaa, ei rakasta, rakastaa, ei rakasta...Henri Myllyniemi / piksu

Fiksut ihmiset, hölmö asetelmaHannu Visti

Ekonomisti pitää euroa suurena virheenä – ”Euro tappaa Euroopan”Uusi Suomi