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Thursday, June 20

20th Jun - US Close: Chinese join the crisis

Previously on MoreLiver’s:

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Roundups & Commentary
Markets – Between The Hedges
The Closer – alphaville / FT
Europe: European Markets Plunge Most In 20 Months – ZH
US: Liquidation - Stocks, Bonds, Commodities Collapse – ZH

Indicative programme – Ecofin Council meeting 21 June 2013Consilium (pdf)

The UK must fix the banks for the next stage of recoveryThe A-List / FT

IMF to suspend aid payments to Greece unless bailout hole pluggedFT
IMF warned it would suspend aid payments by the end of next month, unless a shortfall in Greece’s bailout program was filled by euro-zone leaders.

Stocks Plunge As IMF Tells Greece To Plug Holes Or It Pulls The PlugZH

Fiscal multipliers in turbulent times: the case of SpainBank of Spain (pdf)
Bank of Spain Working Papers by Pablo Hernández de Cos and Enrique Moral-Benito

Philly Fed Manufacturing Survey indicates Expansion in June – Calculated Risk
Strongest Philly Fed Since April 2011 Reinforces Taper Tantrum – ZH
Philly Fed Notes Rebound in Manufacturing – WSJ

It’s Not Just the Fed, It’s China, TooWSJ
China is going through a serious liquidity squeeze.

An unwind in the great Chinese over-invoicing carry-trade?alphaville / FT
The popular explanation for the rise in Chinese repo rates is being linked to the government’s desire to rein in the shadow banking sector. That is to say the tightness is intentional. But what if it isn’t. What if it has more to do with the unwind of yet another carry trade?

Here Is What's Going On In China: The Bronze Swan ReduxZH
The end of a major shadow leverage conduit (one involving unlimited rehypothecation at that),and the collapse of a core source of shadow liquidity. One month later, China's "Lehman event" is on the verge of appearing, and with Overnight repo rates hitting 25% last night, coupled with rumors of bank bailouts rampant, it very well already may have but don't expect the secretive Chinese politburo and PBOC to disclose it any time soon.

China's Volcker shockFree exchange / The Economist
But when the banks then come begging for the funding they need to support their hidden balance sheets, they are once again at Mr Zhou's mercy. And so far, he has shown little.

Update on China's funding situation: throwing out the baby with the bath waterSober Look
Let's hope China is prepared for its own version of the Great Recession.

Briefing by BOJ Executive Director: More to Come on Abe's Third ArrowMarc to Market
The key take away is that investors should not rush to judgment about Prime Minister Abe's third arrow--structural reforms. Many observers shared our disappointment with the structural reforms Abe announced recently… New, expanded and targeted structural reforms will likely be announced in late Q4.

Chinese monetary policy, with Maoist characteristicsalphaville / FT
The following, from Hexun News via Chinascope Financial, might be illuminating. It describes an executive meeting of the State Council last night chaired by premier Li Kequiang:

Emerging Markets: What has ChangedMarc to Market
The FOMC meeting and the market reaction has fed into a deeper re-pricing of assets globally.

EMageddon: the Socratic dialoguealphaville / FT
Nomura has published a debate between Olgay Buyukkayali and Tony Volpon, top EM strategists, about the sell-off.

IMF Research BulletinIMF (pdf)
Summarizes key components of research done at the IMF

EMEA Weekly, Week 26Danske Bank (pdf)

OECD: Falling Labor Costs Point to Low Inflation PressuresWSJ
Wages in developed economies grew at a slower pace than productivity during the first quarter of 2013, an indication that inflationary pressures remain weak, the OECD said.

Teollisuudella ei ole syytä luottaa Suomen valtion pitävän huolta teollisuuden eduista – siksipä Suomeen ei investoidatyhmyri

Ex-ministeriltä suorat sanat Kataisen hallitukselleIL
Ex-valtiovarainministeri Iiro Viinanen ärähtää hallitukselle ja ay-liikkeelle.

EU-keskustelu osoitti että sitä pitää jatkaademari

Pääkirjoitus: Kultarannan pöydästä löytyi jokaiselle jotakinIL
Eliitin aiempi eurohype on muuttunut vähättelyksi ja synkistelyksi.

Ulkolinja: Stora Enson tuplakirjanpito?YLE Areena
Vuonna 2000 Stora Enso teki historiansa huonoimmat kaupat ostamalla yhdysvaltalaisen Consolidated Papers -yrityksen. Syntyi miljarditappiot, jotka Stora Enso pimitti kirjanpitoonsa, paljastaa yrityksen entinen työntekijä