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Thursday, June 27

27th Jun - US Close: Banking union decaf, Cyprus, Fed misunderstood XIV

Previously on MoreLiver’s:

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Roundups & Commentary
Markets – Between The Hedges
The Closer – alphaville / FT
US: Bonds Bid; Stocks Stall At 50DMA; Gold/Silver Shellacked (Again) – ZH

UK Growth has been even worse than we thought mainly macro

Training For a Non-Existent Job WSJ
European leaders gathered in Brussels are crafting an array of plans to tackle youth unemployment, one of the harshest symptoms of the economic crisis, but history suggests many of their proposals will have mixed results.

Q&A: haircuts, shaky lenders and banking unionBrussels Blog / FT

A European Camel is a Horse Made in CommitteeMarc to Market

Geek’s Guide to EU Bank FailuresWSJ
Seven handy questions and answers on planned EU rules for dealing with bank failures.

Bail-Ins: EU Deal Protects Taxpayers in Bank BailoutsSpiegel
Under an agreement reached early Thursday, European banks, their investors and depositors will be required to cover at least 8 percent of potential losses before governments step in with aid. It is a major step forward for the planned European banking union.

Press release ECOFIN Council meeting 26-27 June 2013Consilium (pdf)

Banking Union: New rules to save failed banksPresseurop

EU’s Failed Banks Pact: A Cheat SheetWSJ

EU bail-in rules give taxpayer partial protectionBreakingviews / Reuters
European taxpayers are gradually being insulated from the risks taken on by their banks. An agreement reached in the early hours of June 27 by European Union finance ministers means that future bailouts will be financed to a greater extent by bank shareholders and creditors, rather than via public money. That represents significant progress.

Cyprus: Statement by the European Commission and the IMF IMF
The eurozone’s second sovereign restructuring, confirmed alphaville / FT
We saw this coming. While it’s not a full write-down, nor is it simply a rollover of debt. Extending maturities without raising the coupon sounds like a haircut to net present value…

Interim Report June 2013 – ICFCBS (pdf)
Independent Commission on the Future of the Cyprus Banking Sector

Deposit flight and deleveraging of the Cypriot banking system Bruegel

Overview of Spain’s economy in 2012 - reflection and outlook BIS (pdf)
Testimony by Mr Luis M Linde, Governor of the Bank of Spain, before the Parliamentary Committee on Economic Affairs and Competitiveness, Madrid, 20 June 2013.

(interactive) The State of U.S. Business, in ChartsWSJ

How's the public debt looking? Not bad!Wonkblog / WP

Fed’s Dudley: Markets Wrong to Think Tighter Policy Coming SoonWSJ
Dudley Speaks: "Taper May Be Appropriate Later In 2013"ZH
Fed’s Powell: Market Adjustments Larger Than Justified by What Fed Has SaidWSJ
Fed’s Lockhart: FOMC Meeting Wasn’t Major Shift in DirectionWSJ

1 Week Alongside the Fed's Open Mouth OperationZH

Dudley, Powell: hey markets, relaxalphaville / FT
Several FOMC members have had their say since last week’s meeting

The other riskButtonwood / The Economist
The core PCE number is only 1% - a modern low - and the Dallas Fed, which uses a trimmed mean number (eliminating the outliers), actually recorded a small fall in the latest numbers

Low Inflation Highlights Fed DilemmaWSJ
Inflation is running well below the Fed’s 2% target. Thursday’s reading on the Fed’s favorite inflation gauge showed prices up just 1.1% in May from a year earlier, matching the lowest pace on record.

Bernanke Was Clear, Fed’s Crystal Ball Is CloudyView / BB
Grow up, people. It’s time to stop blaming Bernanke for your losses. Either you weren’t listening or you heard only what you wanted to hear.

Why Markets Aren’t Getting the Fed’s MessageView / BB
Bernanke can’t seem to get the market to understand the central bank’s plans. The problem might be less his communication skills than what he’s trying to communicate.

Personal Savings Rate Rises To 2013 High As Consumers Defer Spending SpreeZH
Personal Income increase 0.5% in May, Spending increased 0.3% – Calculated Risk
Consumer spending rebounds, jobless claims fall – Reuters
Consumer Spending in U.S. Rebounds as Incomes Increase – BB
Core PCE Remains at Historic Low – dshort
Real Disposable Income Per Capita: Up Only 0.43% Year-over-Year – dshort

Australia: A Fading Star? BCA

Here’s the Real Crisis in AustraliaView / BB
Australia is about to pay the price for growing so addicted to a developing nation. Exporting natural resources led to the neglect and atrophying of other critical sectors. It’s created a two-speed economy: The commodities-rich western states and Queensland raced ahead on China’s once insatiable demand for metals, while the rest of the country lagged behind.

Michael Pettis on the China Liquidity Crunch; China Bulls BewareMish’s

Emerging Markets: What has ChangedMarc to Market

EMEA WeeklyDanske Bank (pdf)

Stress Indicators: Close to margin call? TradingFloor
Steen Jakobsen: The Stress Indicators reflect the margin call on banks from global central banks and the US Dollar's positive bias is again rising. We conclude that the business cycle is hitting a new low with a subsequent slight recovery over the next 30-40 days.

Breaking Bad HabitsProject Syndicate
Stephen S. Roach: At last, central banks in the US and China seem to be headed toward monetary-policy normalization. While the move will be painful for liquidity-addicted investors, nothing less can ensure that current excesses in asset and credit markets do not spawn new and dangerous distortions in the global economy.

Making the financial system more resilientBIS (pdf)
Dr Jens Weidmann, President of the Deutsche Bundesbank, at the 2013 FESE (Federation of European Securities Exchanges) Convention, Berlin, 27 June 2013.

Intervention in a panel on "The future of Europe"BIS (pdf)
Mr Jörg Asmussen, Member of the Executive Board of the European Central Bank, at the IIF (Institute of International Finance) 2013 Spring Membership Meeting, Paris, 26 June 2013.

Vastaanharaamisen valtakuntaHannu Visti

Eroon eurosta ja EU-jäsenehdot uusiksiOlli Immonen / US Puheenvuoro

Vapaakauppaliitosta tulonsiirtounioniksi?Susanna Koski / US Puheenvuoro

Pankki: Asuntojen hinnat luultavasti laskevat SuomessaTalSa
Euroopan keskuspankin pitkään jatkunut liian löysä rahapolitiikka on ajamassa pohjoiset euromaat vaikeuksiin, saksalaispankki Commerzbank arvioi. Ongelmat pyörivät periferiasta keskukseen.

Raportti: Kyproksen pankit luhistuivat piittaamattomuuden kulttuuriinHS
Kyproksen pankkien romahtamisen taustalla on liian löyhä, piittaamaton ja sulkeutunut hallintokulttuuri, joka johti viranomaisten laajaan epäonnistumiseen valvonnassa.