Google Analytics

Tuesday, October 15

15th Oct - Almost a deal, almost the deadline

It now looks as if there will be a bi-partisan deal later today in the US Senate,
which extends the debt ceiling to early February and secures funding for the federal government until mid January. The Senate bill will need to be approved in the House before the deadline for the debt ceiling, so this will be a gun to the head of the House Republicans. – Danske Bank

Mrs Le Pen’s EMU withdrawal plan is based on a study by economists from l’École des Hautes Études in Paris led by Professor Jacques Sapir. It concludes that France, Italy, and Spain would all benefit from EMU-exit, restoring lost labour competitiveness at a stroke without years of depression. Their working assumption is that the eurozone’s North-South imbalances have already gone beyond the point of no return. Attempts to reverse this by deflation and wage cuts must entail mass unemployment and loss of the industrial core. – The Telegraph

Starting last Monday, I am posting only once per day. I will also skip the “regular” link section, but you can access them from my Links-page. I want to have more time to read what I link to – and write as well.

Previously on MoreLiver’s:

Follow ‘MoreLiver’ on Twitter or Facebook

Time to take bets on Frexit and the French franc?The Telegraph
Ambrose Evans-Pritchard: A party committed to withdrawal from the euro, the restoration of French franc, and the complete destruction of monetary union has just defeated the establishment in the Brignoles run-off election.

As Nigel Farage Warned: "In Two Months Of EU Membership, Croatian Exports Fall 11%"ZH
“EU accession has exposed Croatia to greater international competition, and the loss of privileges associated with the Central European Free Trade Agreement (CEFTA).”

Analysis: Italy's reform list reflects tough test for euro zoneReuters
From its high labour taxes to its low literacy scores, Italy's entrenched obstacles to growth point up the enduring failure of some euro zone economies to adapt to the demands of life with no currency flexibility.

The IMF and the legacy of the euro
Susan Schadler: The IMF loans to Greece, Ireland and Portugal are considered controversial by some analysts. This column argues that these loans – granted without having agreed on convincing paths to manageable debt levels – constituted a substantial departure from IMF principles. The situation is costly for Europe and, having now permanently changed the principles guiding large IMF loans, it will be costly for crises to come. A serious rethink of the management and decision-making structure of the IMF is needed.

Europe prepares to come clean on hidden bank losses Reuters
Euro zone countries will consider on Monday how to pay for the repair of their broken banks after health checks next year that are expected to uncover problems that have festered since the financial crisis.

Factbox: Europe's slow march to repair its banksReuters
Euro zone countries are trying to find a way to pay for the repair of their broken banks, testing governments' resolve to come clean on the problems that have festered since the global financial crisis.

Spanish banks fear new capital hit in European reviewReuters
Spanish banks are considering ways to boost their capital amid fears the euro zone's imminent review of their balance sheets will force them to set aside even more cash for potential losses on restructured loans, banking sources in Madrid said.

Franco-German divisions cloud efforts to fix broken banksReuters
The euro zone debated on Monday how to prop up banks likely to be declared unstable next year, but France's blunt criticism of Germany before the meeting laid bare the tensions surrounding the far-reaching financial reform.

Eurozone’s financial institutions more fragmented than everFT
The intrinsic (intractable?) bank bid for sovereign debtalphaville / FT
Europe’s financial institutions are more exposed to their domestic government bonds than at any time since the eurozone crisis started. It has yet to be decided exactly how the European Banking Authority’s stress test of about 150 banks next summer will treat sovereign bond holdings. (Financial Times)

The Agreement: What I'd like to see The Calculated Risk
It is sad, but predictable, that this shutdown and threat to not "pay-the-bills" is happening now…In another year, the House will have lost the short term deficit as an argument (actually for those paying attention, the short term deficit is no longer a serious concern).

U.S. Default a Road to CatastropheWSJ

Hitting the debt ceiling would be terrible even if we didn’t defaultWaPo

Market distortions in the short end of the curveSober Look

The Five Scenarios Of A Debt Ceiling BreachZH

Senators Near Fiscal Deal, but the House Is UncertainNYT

Regional Fed Bosses Struggle With Communication IssueWSJ