EUROPE
Brussels blog round
up 11 – 17 January – Europp
/ LSE
EU reform, voting rights, and is the PP-PSOE era nearing its end in
Spain?
Remorseless troikas – euobserver
Blame somebody else. Speak of one’s own impeccable activities. And don’t
apologise. And that’s rather the ugly beauty of this whole eurozone bailout set
up.
'I'm in politics to
seek solutions, not to block things' – euobserver
Debating how to
increase the role of national parliaments in EU law making is far from being a
new subject, nor is it one to set the pulse racing
A view from London:
Desperately seeking EU reform – euobserver
The big headline from Osborne was his threat that Britain will leave the
EU if it does not reform.
Green Fade-Out:
Europe to Ditch Climate Protection Goals – Spiegel
The EU's reputation as a model of environmental responsibility may soon
be history. The European Commission wants to forgo ambitious climate protection
goals and pave the way for fracking -- jeopardizing Germany's touted energy
revolution in the process.
France: Exiting the
crisis
– BNP
The crisis is winding down, but it has taken its toll on the French
economy. Efforts will have to be taken to rebuild capacity.
EUROPEAN CENTRAL BANK
Great Graphic:
Eurosystem's Excess Liquidity – Marc
to Market
Both China and the euro area are currently experiencing liquidity
squeezes…
In part, what is happening is the decline in excess liquidity in the euro area. It was
the excess liquidity that kept the EONIA near the floor of the ECB's rate
corridor.
Is the ECB making
“rookie mistakes?” – The Money Illusion
They are running years behind the Fed in figuring out how to do things…the ECB doesn’t seem to realize that the only way for
the eurozone as a whole to become more “competitive” is to raise the inflation
rate.
How the ECB could be
radical by being old fashioned – Mainly
Macro
Forward commitment could be sold not as a radical new policy, but a
return to a very old one: money targeting. The one major central bank that did
maintain a money targeting policy for more than a few years was the Bundesbank.
Richmond Fed President
Jeffrey Lacker, who is skeptical of bond buying, wants to see them dialed down
further.
How bank reserves
make the gap between deposits and loans disappear – Sober
Look
QE, which is directly responsible for the $2.4 trillion in excess
reserves, was not helpful (and possibly harmful) to credit growth in the US.
Will a potentially squeezed middle-class still show much love for the
"Abe show" will be left if the wage growth/inflation spreads widens
substantially post VAT-hike?
Will China's Shadow
Banking Craze Slow Down? – BB
There are two ways governments can try to prevent crises: They can
guarantee the nominal value of every asset believed to be "safe," or
they can try to set investors straight. The Chinese government is maybe
experimenting with the latter.
Thailand’s “Godfather
IV”
– Project
Syndicate
In today’s Bangkok – racked by power struggles and lawlessness – Mario
Puzo would have found rich material for a sequel to his classic book The
Godfather.
MARKETS
Currencies of natural
resource exporters under pressure – Sober Look
S&P 500 Analyst
Ratings By Sector – Bespoke
Sector performance is well correlated with increases in Sell ratings.
Four of the five worst performing sectors had the biggest increases in Sell
ratings.
Sovereign-debt
markets: Following a new script – The
Economist
Bonds are unexpectedly popular so far
Citi: "Time For
Yields To Correct Lower" – ZH
As the Fed’s stimulus program appears to have “peaked” Citi warned investors
yesterday to be cautious with the Equity markets; and recent price action
across the Treasury curve suggests lower yields can be seen and US 10 year
yields are in danger of retesting the 2.40% area.
Insights: The secular
bond bull market will not return – Nordea
Some economists, including Larry Summers who fears secular stagnation,
are still very pessimistic regarding the US economic outlook due to what they
see as structural constraints on the demand and/or the supply side of the
economy. In this analysis we look deeper into these gloomy views and argue why
we disagree and how we see the longer-term outlook for US interest rates.
ECONOMICS
The world economy
regains its old footing in 2014 – BNP
World growth should accelerate mildly to 3.5% in 2014 after dropping to
2.9% in 2013, the slowest pace since 2009. More evenly distributed, growth will
no longer depend so heavily on the emerging countries and more on “Old Europe”,
notably the EMU, which has finally pulled out of recession. Inflation will
remain low, and in the eurozone, it will hold well below the ECB’s 2% target.
This gives the ECB more leeway to further increase its support for the economy
via securities purchasing programmes, long-term lending or even one final key
rate cut.
Macro Horizons: At
Least the Advanced Economies Are Doing Well – WSJ
Taming Bubbles is
Hard, But Central Banks Can Try: Dallas Fed Paper – WSJ
Can government officials pop an asset bubble by warning one is forming? A
lot depends on timing and credibility.
Chief Economist's
Corner: The Catch-22 of monetary policy – Nordea
Judging from almost all economic indicators 2013 ended on a stronger
note – providing a good platform for the new year when the threats of recession
should finally disappear from the horizon. Projections about the future are as
always fraught with significant uncertainty. One of the key risks linked to
forecasts for 2014 is monetary policy, which has been an important building
block in the restoration of the world economy since the start of the big recession
in 2008.
HSBC’s analysis of
sovereign CDS – Sober
Look
An interesting paper from HSBC on sovereign CDS. They used cluster
analysis to show that correlations in CDS spreads are less about geographic
proximity and more about related risk profiles of various nations. The
researchers also show how the clustering changed over time.
Bank capital: A
worrying wobble – The
Economist
Why economics gets a
bad rap – Noah
Smith / The Week
Point your pitchforks at someone else, thanks
Debunking the Idea
that “Structural Reforms” Reduce Unemployment – naked
capitalism
Getting Lucky – Oak
Tree Capital
FINNISH
Pääkirjoitus: Tulojen ja menojen epäsuhta on
ongelma – HS
Onko meppien tarkoituskaan tietää mitä tekevät? – Sampo Terho
Antti Rinne: ”Ei kannatus ole yksin Jutan
syy” – TE
Suomen ekonomistit vaativat EKP:ltä lisää
elvytystä – TalSa
Suomalaisekonomistit ovat yksimielisiä siitä,
että Euroopan keskuspankin (EKP) rahapolitiikan pitäisi olla nykyistä
elvyttävämpää. Taloussanomien haastattelemista yhdeksästä ekonomistista kuusi
ehdottaa EKP:lle Yhdysvaltain, Japanin ja Englannin keskuspankin tapaisia
velkakirjaostoja, neljä negatiivista talletuskorkoa.
Liittoutuneet saavat yhä vahtia Saksaa – TalSa
Ei ole ihme, ettei Saksa saanut
amerikkalaisilta keskinäisen vakoilun kieltävää No-Spy-herrasmiessopimusta. Yhdysvalloilla
on nimittäin yhä toisen maailmansodan peruina erikoisoikeuksia valvoa
saksalaisia.
Tanskanen: Pankkialan ehdotus asuntojen
lainakatosta hyväksyttävissä – HS
Pankit pyörsivät kantansa: Asuntolainojen
katto lähellä toteutumista – HS
Ministerin
esikunnan mukaan "asia ratkeaa lähiaikoina".
Raju arvio Rehnistä – IL
EUobserver
-lehden kolumnisti vertaa Olli Rehnin karismaa kynnysmattoon.
Seuraavaksi meitä väijyy deflaatio-mörkö – Jan
Hurri / TalSa
Inflaatio-peikko
on ilkeä olento, mutta deflaatio-mörkö on vielä ilkeämpi. Näin pelottelevat EKP
ja useimmat muutkin keskuspankit Suomen Pankista lähtien. Viime viikolla
mörkövaroituksen esitti valuuttarahasto IMF. Mutta ehkä hintojen lasku ei
sittenkään ole niin pelottavaa kuin mörkövaroitukset väittävät.
Turha syyttää euroa – Talouden
Tulkki
Vakaa valuutta vai vakaa talous – vakaa
valuutta aiheuttaa talouden epävakautta – Tyhmyri
HS selvitti: Suomalaisjohtajat keräävät
palkkioita veroparatiiseista – HS
HS keräsi
yli kaksi miljoonaa sivua Luxemburgin ja Sveitsin kaupparekisterien tietoja.
Aineisto kertoo, miksi 2 200 suomalaista käyttää veroparatiiseja.
Veroparatiiseista ja verosuunnittelusta – Valtteri
Aaltonen / US