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Thursday, May 23

23rd May - US Close: Japan's Crash

Now that no-one (FED, ECB, SPX, EURUSD, etc.) is leading the way, global markets are taking their cue from the Nikkei. Funny.

Previously on MoreLiver’s:

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Roundups & Commentary
Markets – Between The Hedges
The Closer – alphaville / FT
Europe: Stocks Dive Most In 10 Months – ZH
US: "Dead Cat Bounce" Or "Pause That Refreshes" – ZH

Will Slovenia be next week’s Brussels target?Brussels blog / FT

Research Euroland: Fact Book GermanyDanske Bank (pdf)

Reading the Markets SwedenDanske Bank (pdf)
We have finally made up our minds about Q1 GDP – 0.7% y/y is the figure we expect. If correct, pressure on the Riksbank will increase further

Europe’s Lost KeynesiansProject Syndicate
Kenneth Rogoff: There is no magic Keynesian bullet for the eurozone’s woes, despite what many commentators and much of the public seem to believe. The eurozone’s difficulties stem from European financial and monetary integration having gotten too far ahead of actual political, fiscal, and banking union – not exactly a problem that Keynes tried to address.
CHF: Floored but no one’s countingNordea (pdf)
We forecast EURCHF at 1.25 by year-end and at mid-2014, and 1.30 at end-2014. Recent CHF weakness reflects the general risk-on environment while also speculations about additional easing measures being imposed by the SNB

Spanish Bonds Slide With Italy’s Amid Signs of Global SlowdownBB

The ECB Should Act to Avert the Risk of Deflation in the Euro Area PIIE
When price stability is assured, there is no need to change policy. When price stability is at risk, policy should be changed to fulfill the mandate.

The Two Charts That Keep Draghi Up At NightZH
From BNP: non-performing loans, interest rates on loans to corporations

Vítor Constâncio: The European crisis and the role of the financial systemECB

Benoît Cœuré: The Single Resolution Mechanism: Why it is neededECB

Fed’s Williams: Bond Purchases Could Move Up Even After Tapering StartsWSJ

Dudley Says Decision on Taper Will Require 3-4 MonthsBB

Yikes! The Japanese stock market cratered overnightWonkblog / WP

Why Japan? Because That’s Where the Profits WereWSJ
The problem is not that such markets are overvalued per se; it’s that they become the go-to place to take profits when investors get jittery.

Everyone’s scared of somethingalphaville / FT
Nomura’s Richard Koo put out a note on Tuesday reacting to the rise in JGB yields since the Bank of Japan went into QE overdrive that seems worthy of some attention.

Abenomics gets the Alphachat podcast treatmentalphaville / FT
A chat with Citi FX strategist Steven Englander to discuss all things Abenomics — the risks and the possible rewards and why Steven is bearish

Japanese Corporates Not Yen Bears (Any More)Marc to Market

Japanese Bond Rout ContinuesMish’s
BoJ vows to curb bond turbulence, curbing turbulence is theoretically easy

Elementary, My Dear Watanabe-sanKrugman / NYT
So to the extent that this wasn’t just markets doing their occasional panic thing, it looks like a sudden outbreak of concern about whether the Bank of Japan has really changed as much as it seems.

Japan’s Decline IS Elementary (Market Dynamics)PragCap
By committing to be “credibly irresponsible” the central bank can actually contribute to the boom which then creates the imbalance that results in the bust.

Markets Rattled Amid Fears of Slowdown in AsiaNYT

SocGen: "Hedge Funds Have Already Started To Unload Nikkei"ZH

UBS On Japan - Are You 'Abe'liever?ZH

Richard Koo Warns Of "Beginning Of The End" For Japanese EconomyZH

‘Fed Won’t Stand in the Way of Growth’ and Other ThoughtsWSJ
Here are a few reactions from analysts and economists:

Misreading the Global EconomyProject Syndicate
Over the last three years, the IMF's economic forecasts have repeatedly proved to be overly optimistic. The problem is rooted in a misdiagnosis of the global economy's problems, including the impact of the eurozone crisis and slowing GDP growth in emerging economies.

The Rules, Part XXXVIII The Aleph Blog
What errors do most money managers make today?

EMEA Weekly, Week 22Danske Bank (pdf)

Chinese weakness and monetary policy uncertainty triggers sell-offDanske Bank (pdf)
The end of risk rally? Probably not

2013 Summer Reading List — Curated Recommendations For a Curious MindFarnam Street

31 Charts That Will Restore Your Faith In HumanityBI