Google Analytics

Sunday, June 9

9th Jun - Weekender: Linkfest

Europe's half-hearted banking union, Fed's QE-tapering, ECB playing tough for the political needs of Germany (the coming elections and the German Constitutional Court's hearings next week)

Previously on MoreLiver’s:

Follow ‘MoreLiver’ on Twitter or Facebook

Brussels blog round-up for 1 – 7 JuneEuropp / LSE
IMF admits mistakes in Greek bailout, Brussels vs Brussels, and a red card for EU legislation?

All is well in the euro landSober Look
It is remarkable just how much faith the markets are placing in the Eurozone's stability these days… Enjoy it while it lasts.

The Smartest Man in EuropeThe Big Picture
Investors hate Europe, and that has me licking my lips.

Angela Merkel on Europe: 'We Are All in the Same Boat'Spiegel
In a SPIEGEL interview, Chancellor Angela Merkel discusses Germany's power in the euro crisis and explains why the country exports weapons to authoritarian regimes like Saudi Arabia.

Interior Minister: Germany to Deport 'Poverty Immigrants'Spiegel

Europe’s banking union: A la carte and half-bakedThe Economist
Mr Draghi, the ECB’s president, was mindful of “moral hazard”: the danger that debtor countries would let discipline slip once the pressure was off. It turns out, though, that moral hazard affects creditor countries as well.

Europe’s banking union: Till default do us partThe Economist
Half-hearted banking union raises more risks than it solves.

A Single Resolution ‘Nothaurity’Brussels blog / FT
Recent comments from the ECB, Germany and France raise questions over how decisions will be taken in the euro zone's planned resolution mechanism.

In defense of OMT ahead of KarlsruheBruegel
Next week, the German constitutional court will debate and consider the legality of the European Stability Mechanism (ESM) and the ECB’s Outright Monetary Transaction programme (OMT)…In last consequence, the court could force the German government to bring the ECB to the European Court of Justice or, even more dramatically, request Germany to leave the eurozone as the former constitutional court judge Udo di Fabio argued.

The European Central Bank’s deterrent: Bench pressThe Economist
The legitimacy of the doctrine that calmed panicky markets is challenged

Depressing DraghiKrugman / NYT
Now, I find it hard to believe that Draghi is unaware of these issues; maybe he’s just playing to the inflation hawks on his board.

Who Has Draghi’s Back?Krugman / NYT
The moral is that the fiscal flaws of the euro run even deeper than people realize.

Greece sacrificed to save euroTo Vima / Presseurop
The IMF bailout of Greece has above all allowed its creditors to dodge their responsibilities and guard against contagion. The Greeks should revolt and renegotiate the terms of the loan.

“Price is not destiny”alphaville / FT
Like other Europe-focused strategists, William Porter at Credit Suisse has had some fun scrolling through the IMF’s mea culpa on Greece. He notes that the IMF now admits that its actions were affected by a fear of market contagion, a misunderstanding of how to do a restructuring within a currency union and, most importantly perhaps, a dysfunctional dynamic within the Troika itself.

Rehn in war of words with IMFeuobserver

Greek GDP Plunges To Year 2000 LevelsZH

How did we get here? A "map" of the Fed's balance sheet's historySober Look
People have trouble distinguishing between the liquidity facilities provided by the central bank and the various monetary expansion activities.

Fed's Plosser says jobs report another reason to trim QE3Reuters
The latest jobs report on Friday showed that government spending cuts have so far not been as damaging as some feared, Philadelphia Fed President Charles Plosser said, adding it only entrenched his opinion that the Federal Reserve should reduce its bond buying "now".

How Will the Fed Trim Bond Purchases?WSJ

Why the Fed Hates the Word ‘Tapering’WSJ

BofAML: The Good, Bad, And Ugly "Taper" ScenariosZH

Our new house-price indicators: Bubble-huntingThe Economist

Is Abenomics failing?Daiwa

What Xi WantsThe Foreign Affairs
As Obama and Xi meet today, it is a good thing that they are apparently more interested in substance than formalities. Both are aware of the need to develop a new type of great-power relationship built on partnership, and the best way for them to do so is to roll up their sleeves and get to work.

Richard Koo: "Honeymoon For Abenomics Is Over"ZH
Stocks had risen far above the level justified by improvements in the real economy. It was overseas investors (particularly US hedge funds) that responded to Abe's comments late last year by closing out their positions in the euro (having been unable to profit from the Euro's collapse) and redeploying those funds in Japan, where they drove the yen lower and pushed stocks higher.

Exit strategies: Time to think about
Charles Wyplosz: Central banks on both sides of the Atlantic are pondering ways of unwinding their bloated balance sheets and easing out of extraordinary post-crisis monetary policy interventions. This column discusses the recent Geneva Conference on the World Economy that focused on ‘exit strategies’. Where exactly do central banks exit? And how?

The fact is markets had gone up too far and too fastThe Telegraph
A number of different factors have combined to create the impression of a co-ordinated slide, but the causes of the various market wobbles are subtly different.

The Day The Big Fat Junk-Bond Bubble Blew UpTestosterone Pit

Weekend Sentiment Summary The Short Side of the Long

Book Bits | 6.8.13The Capital Spectator

The Hunt for Steve CohenVanity Fair
With arrest after arrest in a massive, seven-year insider-trading investigation, U.S. Attorney Preet Bharara is getting closer to the biggest fish of them all: Steve Cohen, founder of SAC Capital, the $14 billion hedge fund, who some regard as the most successful stock picker of his time.

Corporate Profits-to-GDP: Why Doesn't Buffett Care?Brooklyn Investor

Profit Margins Are Irrelevant – Stock Prices Measure Liquidity, Not Profit GrowthThe Wall Street Examiner

The Absolute Return Letter June 2013:  The Wisdom of CrowdsARP
Occasionally, the Wisdom of Crowds turns into the Madness of Mobs and all rational behaviour goes out the window.

The zero-sum trade in peopleCoppola Comment
The problem of internal devaluation where there are skills shortages, skills gluts, labour market rigidities and a falling birth rate looks insoluble. But I don't think it is.

Everything the IMF wanted to know about financial regulation and wasn’t afraid to
Does anybody have a clear vision of the desirable financial system of the future? This column has one. It gives simple answers to 12 simple questions panellists at a recent IMF conference failed to answer.

A viable alternative to Basel III prudential
Global banking regulation is undergoing a massive reform, known as Basel III. This column argues that the proposed reforms will fail to correct flaws in the old system. The new rules are even more complicated, opaque and open to manipulation. What is needed is a radical shift to prudential rule based on a straight capital ratio.

Why people online don’t read to the endSlate

Target2-järjestelmän käyttö eurokriisitoimien perusteluna on puhdasta huuhaataTyhmyri

Japanin harrastukset: tuplaa tai kuittia ja flirttiä karhumarkkinoiden kanssaHenri Myllyniemi / Piksu

Puurot ja vellit sekaisin eduskunnassaPauli Vahtera

Kuinka lopettaa Eurokriisi muutamassa kuukaudessa jos halua olisi – Abenomics editionTyhmyri

Pankki laskee nyt riskinsä tarkkaanHS
Pienet ja keskikokoiset yritykset maksavat nyt hintaa siitä, että rahoituskriisit ovat ehkä vastaisuudessa harvinaisempia ja pankit pysyvät tukevammin pystyssä.

Rehn moittii IMF:ää: "Yrittää pestä kätensä"HS

Kreikka on konkurssissa – samalla miljardien maksut EKP:lleTalSa
Euroopan keskuspankki perii romahduspisteessä olevalta Kreikalta miljardien maksuja. Samalla se vaarantaa myös Suomen varoja – täysin turhaan.

Ekonomistit: Kreikan velkoja todennäköisesti leikataanTalSa
Kansainvälinen valuuttarahasto arvioi eilen, että Kreikka saattaa tarvita talousongelmista selvitäkseen uusia helpotuksia. Suomalaispankkien pääekonomistit pitävät mahdollisena, että Kreikan velkoja leikataan.

Turhaa uhoa: Kreikka-huojennukset jo tosiasiaJan Hurri / TalSa
Valtiovarainministeriö vakuuttaa, että Kreikka-vakuudet pitävät eikä Suomi tingi turvastaan. VM:n mukaan olisi outoa, jos Suomi heikentäisi kovalla vaivalla hankkimaansa vakuusturvaa suostumalla Kreikan tukiluottojen huojennuksiin. Vakuuttelu kuulostaa oudolta, sillä Suomi on jo suostunut tuntuviin Kreikka-huojennuksiin.

IMF myönsi virheensä – komissio ei Henri Myllyniemi / Perussuomalainen
Kreikka on joutunut maksamaan säästökuuristaan järkyttävän hinnan. Talouden uudistuksia yritettiin runnoa läpi mahdottomassa aikataulussa. Henri Myllyniemen analyysi valottaa IMF:n ja Euroopan komission tekemiä virheitä.

Käänne Euroopan sääntelyynVerkkouutiset
Iso joukko eurooppalaisia huippupäättäjiä, lobbareita ja elinkinoelämän edustajia kokoontui torstaina ja perjantaina Helsinkiin Centre for European Studiesin (CES) järjestämään Economic Ideas Forumiin. Mitä jäi käteen?