Previously on MoreLiver’s:
Special: Bailout of Cyprus (updated)
EUROPE
Cyprus crisis
continues, creative accounting in Spain, and is Germany Europe’s bully?
(audio) BizDaily: Eurozone Round-Up 29-Mar – BBC
(mp3)
Is the crisis really
over or are recent events in Cyprus a stark reminder of how fragile the region
is? Yves Bertonici is the Director of Notre Europe, a think-tank committed to
more EU integration. We ask him whether the bailout of Cyprus breaks fresh
ground in the way Europe deals with failing member countries. Steve Evans
reports on the formation of a new political party in Germany, a sign of
disenchantment with the Euro spreading right to the centre of the union. And
political uncertainty continues in Italy but some business leaders are already
drawing up their demands for the new leadership - top of the list: Labour
Reform.
As I have said before,
its too easy to be rude about austerity. It is harder to put yourself in the
mindset of reasonable individuals who take a different view, and pinpoint
exactly - in ways that they will understand - why their view is wrong… There is
a big mistake being made here. It essentially involves the prioritisation of
issues. Fiscal adjustment is seen as the overriding priority. Issues involving
the state of the economy are secondary: they are one factor in judging the
appropriate speed of adjustment. This is the wrong way around.
Cyprus’s president says that country’s economic crisis is now contained, and
it won’t need to leave the euro. But even if you believe him, that hardly means
Europe is out of the woods. Slovenia was prompting concern last week, and Luxembourg and Malta are also stoking worries. And that’s not to
mention the biggies Italy and Spain, whose failure would probably spark a
worldwide economic crisis.
Timeline – Eurozone crisis: three-and-a-half
years of pain – The
Guardian
Cyprus's banks have re-opened after the island became the latest eurozone
country to agree a bailout. It all started back in October 2009, when Greece's finance minister revealed a black hole in
his country's budget.
The drama over Cyprus has made clear that the euro-zone crisis is
developing into a struggle over German hegemony in Europe. On the surface, Merkel and Schäuble seem to
be working to stabilize the economy. In actuality, they're binding other
nations with the shackles of debt.
Eurozone Crisis: Could Informal Problem-Solving
Mechanisms Prove the Conventional Wisdom Wrong? – CFA
Institute
Predictions of the
disintegration of the “European experiment” have yet to be fulfilled despite
more than 1,000 days having passed since the eurozone crisis first began.
Investors owe it to themselves to consider alternate scenarios.
A new analysis by three economists at BofA Merill Lynch Global Research
finds that Europe's major economies could be doomed to sluggish growth
for many years to come
Who Said It? "We Must Buy Government
Bonds" – ZH
ECB
Europe's
Collapse Of Confidence In One Chart – ZH
Divergence between M3 and bank lending
Why European Monetary Policy Is Now Impotent – ZH
AXA: The real divide
within the euro area is the still broken monetary policy transmission
mechanism.
AUSTERITY
Shredded Social Safety Net: European Austerity
Costing Lives – Spiegel
As the euro crisis
wears on, the tough austerity measures implemented in ailing member states are
resulting in serious health issues, a study revealed on Wednesday. Mental
illness, suicide rates and epidemics are on the rise, while access to care has
dwindled.
The Rewards of Being Very Serious – Krugman
/ NYT
More career
opportunities internationally – national politicians have an incentive to drive
policies not in the interest of the voters.
‘TEMPLATE’
ECB's Knot backs Dijsselbloem comments on bank
rescues – Reuters
ECB Governing Council
member Klaas Knot said on Friday there was "little wrong" with
Eurogroup chair Jeroen Dijsselbloem's recipe for dealing with future euro zone
banking crises, a newspaper reported.
In Luxembourg, leaders are warning that applying the Cypriot
bailout model -- a levy on bank deposits -- to other crisis-plagued countries
could lead to a flight of investors from Europe. But the EU is considering the option anyway.
When Will Deposit Haircuts Take Place In Other
European Countries? – ZH
The reality however is
that all of Europe's banks have a soaring bad-asset overhang, and
sooner or later it will have to be resolved… It is now common knowledge that
such resolution will not take place via additional liquidity injections, but
through impairment of the various liability classes as per the reverse
waterfall of seniority
Buiter: Most European banks are zombies – Credit
Writedowns
Betray Your Bank Before Your Bank Betrays You – View
/ BB
Wealthy depositors in Spain, Italy, Greece and elsewhere should assume he was speaking
the truth the first time and take measures to protect their money, rather than
trusting governments to do it for them.
FRANCE
France has long had a chronic problem with unemployment, but the current
jobless rate is especially dismal. The government has introduced several
employment programs, but they're not taking effect quickly enough to convince
the country things will get better.
PIIGS
Spanish banks: Up in smoke – The
Economist
Slovenia can afford to
wait for lower borrowing costs before issuing new debt, its top economic
official said on Friday.
News headlines about a
Cyprus-crisis contagion have so far focused largely on Slovenia, Malta, Italy and Spain. But Ukraine could also take a hit. While Ukrainian
businesses are said to have possibly just $1-3bn in Cyprus – much less than the $30bn that has been
estimated for Russia – if this money gets confiscated by the bailout levy or tied up by
financial transaction limitations, it could be enough to tip the country’s
troubled economy deeper into crisis.
UNITED STATES
Comments on Q4 GDP and Investment – Calculated
Risk
About Those (Not So) Record Profits – ZH
FactSet: Negative Earnings Guidance at Seven
Year Highs – The
Reformed Broker
An unusual good news inflation story – Free
exchange / The Economist
Indeed, judging by the
PCE index the Fed is missing its mandate
almost as badly on inflation as it is on unemployment, an even more compelling
reason to maintain a fairly stimulative monetary policy. The main problem with
below-target inflation is that it
translates into higher real interest rates. But real rates are determined by
expected, not actual, inflation. Because consumers and investors focus more on
the CPI, their expectations haven't responded at all to the pronounced slowing
in PCE inflation.
ASIA
The Abenomics Farce Continues – ZH
OTHER
March Began like a
Lion, Ends like a Lamb – Marc
to Market
The holiday casts a
calm over the capital markets, here at month, quarter and, for some, fiscal
year end.
Three days that
saved the world financial system – WP
Adapted from “The Alchemists: Three Central Bankers and a World on
Fire,” by Neil Irwin
No Surprises – The Reformed
Broker
As a general rule, it gets harder and harder to surprise people the more
you do it. So too goes the game of economic expectations - as reports come in
better, economists nudge their forecasts for future reports higher and higher.
Until they get ahead of themselves and the data starts to
"disappoint".
Rethinking Macro
Policy II: First Steps and Early Lessons – IMF
The IMF Will Host a Conference on "Rethinking Macro Policy II:
First Steps and Early Lessons": conference will be webcast LIVE 16-17
April.
Weekend Reading for
Financial Advisers: Jeremy Grantham, Steve Jobs, and Marshmallows – CFA Institute
Will driverless cars
solve our energy problems — or just create new ones? – Wonkblog
/ WP
The Price Is Wrong – Krugman /
NYT
No, you can’t say “Well, there may be truth to both views”. Either the
economy is supply-constrained or it’s demand-constrained.
BANKS
The White House’s
dangerous stance on ‘too big to fail’ – PostPartisan
/ WP
The Debate on Bank
Size Is Over – Economix
/ NYT
Simon Johnson: While bank lobbyists and some commentators are suddenly
taken with the idea that an active debate is under way about whether to limit
bank size in the United States, they are wrong. The
debate is over; the decision to cap the size of the largest banks has been
made. All that remains is to work out the details.
‘TEMPLATE’
Canada Discusses Forced Depositor Bail-In Procedures for
"Too Big To Fail" Banks in 2013 Budget – Mish’s
IN FINNISH
Tarvitsemme Risto Rytiä – Henri
Myllyniemi / Piksu
"Ensimmäistä kertaa euro ei ole euro
koko talousalueella" – YLE
Professori
Vesa Puttonen uskoo, että Kyproksen pankkien nostorajoituksista ei luovuta
pitkään aikaan.
Hautala & Himanen: oikeuskanslerilla
ongelma – Jukka
Hankamäki
Riskimaan pankkiiri varoittaa poliitikkojen
suhmuroinnista – TalSa
Salaisia palveluksia ja hurjaa riskinottoa,
joka on johtanut veronmaksajien kirstulle. Slovenian suurimman pankin entinen
toimitusjohtaja kertoo, miksi maan pankit ovat pulassa.
Keikuttaako eurovenettä seuraavaksi
Portugali? – TalSa
Portugalin
valtionsääntötuomioistuin päättää lähiviikkoina, ovatko maan hallituksen
kaavailemat säästötoimet maan perustuslain vastaisia.
Taloudellinen katsaus, kevät 2013 julkaistu – Valtiovarainministeriö
Vuonna 2013 Suomen BKT:n ennustetaan kasvavan
0,4 prosenttia. Ennuste pitää sisällään suhdannekäänteen parempaan päin.
Historiaan nähden alhaiset kasvunäkymät sekä epävarmuus tulevasta johtavat
siihen, että yksityiset investoinnit laskevat jo toista vuotta peräkkäin.
Työllisyys heikkenee ja työttömyysaste nousee 8,2 prosenttiin. Vuonna 2014
kasvuksi muodostuu 1,6 % ja talouskasvu on entistä laajapohjaisempaa.
Kotitalouksien säästämisaste säilyy negatiivisena ja velkaantumisaste nousee jo
122 prosenttiin (suora pdf-linkki).