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Thursday, November 14

14th Nov - Bad Europe, Waiting Yellen



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EUROPE
Europe’s (Low) Inflation ProblemKrugman / NYT
Making things impossible for Spain.

BoE can escape its self-made forward guidance trapReuters
When the BoE linked monetary policy to the labour market, it was unduly pessimistic about unemployment. Governor Mark Carney is now trying to fine tune his message, but he could just simplify: rates will stay at record lows for a while, whatever the jobless rate.

  BLAME GERMANY
Rehn, Germany and US Treasury Dept: Round TwoFT

Eurozone Morality Playsmainly macro
Evidence does suggest that seeing the competitiveness imbalances in the Eurozone as simply the result of excess outside Germany is at best only half the story, and at worst not a very realistic story at all.

  SKEPTICS
Euroskeptic Union: Right-Wing Populists Forge EU AllianceSpiegel
Right-wing populists are trying to create a powerful faction in the European Parliament. Leading the efforts are Geert Wilders from the Netherlands and Marine le Pen of France -- and their initiative has big implications for Europe.

Skeptics See Euro Eroding European UnityNYT
“This is what I was afraid of, that the euro would be preserved and it would pervert the venture and destroy the European Union,” he said. “Instead of the solidarity that was supposed to be embodied, it became every country by itself.”

Euro Skeptics in Finland Drop Exit Talk as Debt Crisis EasesBB

  EUROPEAN CENTRAL BANK
Survey on the access to finance of SMEs in the euro area – 4-9 2013ECB

Statistics Pocket Book, November 2013ECB

Monthly Bulletin, November 2013ECB

  PIIGS
Portugal: Letter of Intent, MemorandumIMF

With bailout risk building, Slovenian PM seeks to shore up supportReuters
Slovenia's efforts to avert a bailout are likely to win the government a confidence vote on Thursday, even though the cost of a bank clean-up risks tipping the euro zone country's finances over the edge.

  GDP NUMBERS
German growth normalizationMerkelnomics

German GDP meets expectations, but French miss on investmentTradingFloor
France saw its economic output decline in the third quarter as businesses were wary of investing, while German GDP grew on the back of domestic demand. I expect the divergence to continue going forward.

OECD issues warning on French economyFT

Euro area heading back to recession?Nordea
I cannot help but feeling that the Euro area is just one recession away from a serious deflation problem.


Recovery loses momentum in Q3, expected to gain ground in 2014Danske Bank

Narrowly Avoids Return To Contraction In Third Quarter Led By French WeaknessZH

Third-quarter growth faltersFT

German GDP Release Highlights RebalancingWSJ


UNITED STATES
RBS: Fed Monetizes A Record 70% Of All Net Bond Supply"ZH

Missing Piece in the Communication StrategyTim Duy’s Fed Watch
The Fed is clearly signalling they want to change the policy mix.  They are not clearly signalling why.  Kocherlakota effectively makes clear that the "why" has to do with the cost/benefit calculus surrounding asset purchases.  I would very much like Yellen to explain that calculus in her Senate hearing, and wish someone would ask the question directly.  Probably not gonna happen.

  YELLEN
Yellen Likely to Be Grilled on Fed’s Regulatory RoleWSJ

What to Watch for in the Yellen HearingWSJ

John Mauldin: Here’s What the Senate Should Ask Janet YellenWSJ

Wall Street Offers Primers on How to Read Yellen’s TestimonyWSJ

Testimony Vice Chair Janet L. Yellen, Confirmation hearingFED
Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.

Yellen's Remarks Released Early ZH
says “Fed has More Work To Do” Assuring More Dovishness

Yellen to defend Fed's ultra-easy monetary policyReuters

Yellen vs. the Fed criticsReuters
During Janet Yellen's confirmation hearing, one sure criticism is sharply at odds with the facts: That the Fed’s crisis response was an insider affair, run by and for a handful of too-big-to-fail banks.

What to expect in Yellen hearing: El-ErianCNBC


Market Reads too Much into Yellen Prepared RemarksMarc to Market



Yellen's Testimony PreviewZH


Yellen's likely poker face at nomination hearing may offer cluesTradingFloor

*****

Four Key Points From Yellen on TaperingWSJ

Yellen on Stocks: This Isn’t a BubbleWSJ

Hearing Post Mortem (Dovish 32 : 18 Hawkish)ZH

Janet Yellen’s Fed confirmation hearingFT

Yellen faced the Senate today. Here’s everything you need to knowWaPo

Yellen: Balance Budget Effort in 1990s Set Model for This CongressWSJ

   MACRO NUMBERS  



Initial Jobless Claims Miss Expectations For 6th Week In A Row – ZH
Weekly Initial Unemployment Claims decline to 339,000 – ZH
Claims Still Fallling, But Rate Of Decline Slowing – Capital Spectator
Jobless Claims Higher Than Expected – Bespoke

September Trade Balance Worse, Deficit With China Hits Record – ZH
Trade Deficit increased in September to $41.8 Billion – Calculated Risk

U.S. trade, labor data underscore sluggish economy – Reuters
U.S. Trade Gap Widens More Than Forecast to $41.8 Billion – BB
 



ASIA
Was China’s Third Plenum a Bust?The Diplomat

Nirvana eludes Japan after one year of AbenomicsReuters
GDP growth halved in the third quarter. But investors are worried about something else. One year after Shinzo Abe chalked out a path to revival, Japan is still awaiting the structural reforms he promised. Without them, the effect of monetary and fiscal stimulus could soon wane.

Japan: slower growth should prove temporaryDanske Bank

OTHER
Are exchange rates predictable?voxeu.org
Predicting exchange rates is still an inexact science. Economic models perform poorly, and a plethora of alternative methods have been attempted. This column guides the reader through the state of the art, reviewing various predictors, models, and data specifications. Despite a large and divergent literature chasing this holy grail, the toughest benchmark remains the random walk without drift.

FINNISH
Ekonomisti: Saksa tarvitsisi 3 prosentin ohjauskoron 0,25 sijastaVerkkouutiset

EU-vastaiset voimat vahvistuvat – tunnetut oikeistopopulistit liittoonHS

Tausta: EU-kriittisten kirjo on laajaHS

Le Pen saa Sampo Terholta pakitHS

Teollisuuden liikevaihto supistui kesä-elokuussa runsaat 4% yoy – Tilastokeskus
Rakennusyritysten liikevaihto väheni kesä-elok. hieman yoy – Tilastokeskus
Palvelualojen liikevaihto kasvoi kesä-elokuussa 0,7% yoy – Tilastokeskus
Koko kaupan myynti laski syyskuussa 0,5% yoy – Tilastokeskus
Kansantalouden tuotanto pieneni syyskuussa 2013 – Tilastokeskus
Inflaatio lokakuussa 1,2 prosenttia – Tilastokeskus