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Monday, February 10

10th Feb - Europe getting dirty

Previously on MoreLiver’s:

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Europhoria once againBruegel
Should we view the recent fall in spreads and yields as a sign of confidence or as another overreaction?

Europe’s anaemic earnings storyalphaville / FT
Having a low share of a global earnings index is not, perhaps, the end of the world – and can, in part, be explained not just by there being no Apple-sized behemoths in Europe but by a lack of big IPOs. But what is more worrying, as the European earnings season picks up steam, is what fourth-quarter corporate results show about the anaemic regional recovery. SocGen also points out that profit margins at Europe’s non-financial companies are only slightly higher than in 2009.

EU Commissioners hit out at UK Government’s rhetoric on free movementThe Telegraph,

Swiss vote to set limits on immigration from EUThe Telegraph, European Voice, Reuters

Europe Stunned, Angry As Switzerland Votes To Curb ImmigrationZH

Europe faces electoral and policy crossroadsReuters
The threat to its survival may have passed but the euro zone faces electoral and economic crosswinds this year which could push it to break policy taboos while challenging its ability to do so.

Farage Blasts "Bullying Brussels", Cheers Swiss Immigration Curbs BillZH

EU Banks’ Debt Addiction Threatens ECB-Led OverhaulBB
When Europe’s leaders set out in June 2012 to break the “vicious circle” between banks and sovereigns, they left rules for treating government bonds untouched, an oversight that may subvert their drive to prevent a recurrence of the debt crisis.

Danièle Nouy - Interview with Financial TimesECB
Chair of the Supervisory Board of the Single Supervisory Mechanism, 10 Feb 2014

Outright Monetary InfractionsProject Syndicate
Hans-Werner Sinn: The German Constitutional Court has delivered its long-awaited decision on the ECB’s “outright monetary transactions” program. The Court has now declared that it fully endorses the plaintiffs’ arguments, and that the ECB's scheme to purchase potentially unlimited volumes of eurozone governments' bonds does indeed violate EU law.

Germany’s constitutional court has strengthened the euroscepticsFT
Wolfgang Münchau: The OMT is a phantom programme. It was never triggered. Then again, it may have already served its purpose: fooling investors into believing there is a backstop when there is not…So what would happen if the ECB wanted to trigger the scheme? Following this ruling, I am not sure the Bundesbank could participate.

The German Court’s ECB Decision Changes NothingWSJ
Whether or not the OMT ever becomes anything more than a vague promise doesn’t matter because it’s already achieved its purpose–to save the euro during a time when it was under existential attack.

Give the ECB the Power to Save Europe's EconomyView / BB
OMT focuses on financial stability; avoiding deflation is no less important. Bigger, bolder forms of quantitative easing may soon be necessary to ward off this danger. One way or another, this tool must be made available.

ECB Bond Buying: The German Court’s Message To BerlinWSJ
What signal was Germany's constitutional court really sending about the ECB program that many credit with saving the euro?

The German Establishment—Principled but PragmaticPIIE

Europe or Democracy? What German Court Ruling Means for the EuroSpiegel
Germany's Constitutional Court ruling last Friday marks a significant escalation in efforts to rein in the European Central Bank. The ruling's message? Either the European Court of Justice has to stop bond purchases or German justices will.

Italy Banks May Face Up to $20 Billion Capital Gap, ABI SaysBB
Italian banks, which have raised money, sold assets and cut costs to boost capital, may face a shortfall of as much as 15 billion euros ($20 billion) as regulators scrutinize their balance sheets this year.

"Breathtaking" Corruption In EuropeZH

Five Financial Questions for UkraineCFR
There are compelling political arguments for the West to respond with a financing program that makes it economically viable for Ukraine to choose the EU Association Agreement that it rejected last year.  But the economics make a deal hard to put together.  For now, the ball is in Ukraine’s court

Hungary’s central bank: playing with firebeyondbrics / FT

Portugal Hopes to Find Underground Economy Tax Cheats by Giving Away Free Lottery TicketsMish’s

Debt Ceiling Update Marc to Market

Fed’s Rosengren Urges Patience in Pulling Back on Easy Money WSJ

Grand Central: How to Watch Yellen’s Testimony WSJ
Hilsenrath’s take on testimony, plus key developments around the world

As Yellen makes Fed debut, expect theater, not fireworksReuters
Yellen's first test as chair of the Federal Reserve comes on Tuesday when she faces U.S. lawmakers, some hostile to the central bank, who will want to know how committed she is to winding down the Fed's support for the economy.

Flows Don’t Follow Value, They Follow PerformanceThe Reformed Broker

Emerging Markets: Here Come the BullsThe Reformed Broker

PBOC Signals Money-Market Volatility as China Seeks to Tame DebtBB
China Swap Rate Rises After PBOC Says Funding Costs to Stay HighBB
In its quarterly monetary policy report released on Saturday, the People's Bank of China signalled
that volatility in money-market interest rates will persist and borrowing costs will rise

Traders Crying Over Losses Missing HSBC’s BargainsBB
HSBC, which gets more than half of its revenue from emerging markets, says it’s time to start buying their currencies after a sell-off pushed exchange rates to their lowest levels since 2009.

JP Morgan: EM credit growth presents risk of “systemic global financial markets shock” beyondbrics / FT

Yellen, Carney Face Explaining Policy as Benchmarks NearBB

Barclays' Busted For Stealing, Selling Confidential Financial Data Of Thousands Of ClientsZH

UBS seeks first-mover immunity in U.S. currency probe –sourcesReuters

Long-Term Charts 3: Markets Since The Dawn Of CivilizationZH

Stressitestien sivulliset uhritNordea
Pankkien tasesyynin sivuvaikutukset jarruttavat euroalueen talouskasvua. Vaikka EKP:n pääjohtaja Mario Draghi antoi ymmärtää, että käänne luotonannossa voisi olla käsillä, suurta hyppäystä ei kannata nopeasti odottaa.

Sosioekonomiset erot: työurat, eläkkeelle siirtyminen ja eläkejärjestelmäEläketurvakeskus
Duunareista jaksaa eläkeikään vain 39 prosenttiaKL
Ylemmistä toimihenkilöistä vanhuuseläkeiän saavuttaa ansiotyössä 69 prosenttia. Tämä selviää Eläketurvakeskuksen tuoreesta raportista ”Sosioekonomiset erot – työurat, eläkkeelle siirtyminen ja eläkejärjestelmä”

Näkökulma: Kumpi Suomea johtaaIL
Ottaako tasavallan presidentti Sauli Niinistö itselleen liiaksi talouspoliittista valtaa, kirjoittaa Juha Keskinen.

Teollisuustuotanto väheni jouluk.5,2% YoY – Tilastokeskus
Teollisuuden uudet tilaukset vähenivät jouluk. 6,2% YoY – Tilastokeskus