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Monday, July 22

22nd Jul - US Open

Quote of the Day: European banks need at least €350bn to €400bn of new capital. Our top-down and bottom-up work combined with OECD estimates point to a material deficit, two-thirds of which is in the Eurozone. The estimates ignore upside risk from adopting depositor preference. Options to plug the deficit include contingent capital – not CoCos (which do not work, in our view), but forms of standby capital. – Berenberg:  

Previously on MoreLiver’s:

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Roundups & Commentary
Frontrunning – ZH
Overnight: Any news is good news continues – ZH
The Lunch Wrap – alphaville / FT
Emerging N.Y. headlines – beyondbrics / FT
Midday Express (EU daily news) – Europa
Daily press summary – Open Europe
Morning MoneyBeat: So Far, ‘Sell in May’ Has Not Been the Way – WSJ
– Marc to Market

Controlled dismantlement of the Eurozone: A proposal for a New European Monetary System and a new role for the European Central BankNBP (pdf)
National Bank of Poland Working papers by Stefan Kawalec, Ernest Pytlarczyk

Analysis: Fund could recycle German savings to euro strugglersReuters
What if German savers were to help rescue Greece, Portugal or Spain by investing in their state assets and companies rather than bailing them out with taxpayer-backed loans?

Hugo Dixon: How to legitimize EU – decentralizeReuters
The EU is facing a crisis of legitimacy. The most extreme, but not only, manifestation is in the UK, where citizens may vote to quit the EU. Reforms are needed to stop Brussels interfering in things best left to nations.

Europe still sleeping even as Japan, Britain stirReuters
Another month, another listless set of business surveys is likely to show this week just how much the euro zone economy still has to do to get over its debilitating debt and banking crisis.

Euro area government debt up to 92.2% of GDPEurostat

Spanish Sunshine Season Overshadowed by Growth DoubtsBB

Portuguese President Says Coelho Government Will Stay in OfficeBB

Austerity could be 'self-defeating' for Irelandeuobserver
A former IMF official has said Ireland needs to move away from austerity measures if the country's economy is to grow.

Why new leverage ratios rules could stifle repo marketsalphaville / FT
Earlier this month the Fed, together with the Office of the Comptroller of the Currency and the FDIC, proposed a leverage ratio rule for big US banks earlier this month.

Why Fed Has Failed to Lower U.S. UnemploymentView / BB

US earnings season: The earnings' surprise myth exposedTradingFloor
Based on the earnings releases so far in the S&P 500 earnings, surprises are a bad predictor for two-day excess return. Where's the proof? Just take the example of those results at Advanced Macro Devices as illustration.

Weekend Sentiment Summary (July Week 3)The Short Side of the Long

Why Larry Summers Should Not Be Permitted to Run Anything More Important than a Dog Poundnaked capitalism

China risks deflation trap as true GDP crumblesThe Telegraph
Ambrose Evans-Pritchard: China is sliding towards a deflation trap and may be in outright recession already if data are measured accurately, with serious knock-on risks for the global economy.

Chinese financial reform: easy pickingsbeyondbrics / FT
China is often accused of only picking the low-hanging fruit when it comes to policy making. In its decision to liberalise lending rates over the weekend, it didn’t even manage that. This apple had already dropped off the branch.

Bankers, Analysts Divided Over Impact of Interest Bank MoveWSJ
Was it simply a symbolic move, as many bank analysts have been quick to claim? Or can we expect real impacts?

China’s interest rate liberalisation: more complicated than it looks?alphaville / FT
In themselves, the changes announced on Friday are expected to have very limited effects. Or… will they?

China Freeing Lending Rates Puts Focus on Saver ReturnsBB
The biggest step yet by China’s new leaders to move the nation’s financial system toward market-set lending rates heightens focus on what the central bank says is an even tougher reform: lifting restrictions on savers’ returns.

Abe the “Internationalist”?The Diplomat
Japanese Prime Minister Shinzo Abe has now officially exorcised the demons that have haunted him since his stinging resignation as leader in 2007.

Abe vows to keep focus on economy after winReuters
Japanese Prime Minister Shinzo Abe, fresh from a strong election victory, vowed to stay focused on reviving the stagnant economy and sought to counter suspicions he might instead shift emphasis to his nationalist agenda.

Financial Forecast Update July 2013Nordea (pdf)
…or read the summary.

Ruotsi lyö Suomen talouden maaottelussaHS
Erot ostovoimassa selittävät, miksi Ruotsin talouden ennustetaan kasvavan Suomea paremmin

Kruunu vetää rahaa turvakohteenaHS