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Sunday, February 2

2nd Feb - W/E Linkfest

 Europe, US, Emerging markets and some to my Finnish-speaking audience.

Previously on MoreLiver’s:

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Is eurozone governance fit for purpose?ECB
Keynote speech by Benoît Cœuré, Member of the Executive Board of the ECB, at a dinner organized by the Centre for European Reform, London, 30 January 2014

A Brief Interview with Sergio Rebelo on the Euro-Area EconomyMacroblog

Wherever Did Europe’s Sovereign CDS Trading Go?WSJ
The nail in the coffin: European Union plans to ban ‘naked’ short selling in sovereign CDS caused volumes to dwindle, and when the rules finally came into effect, trading almost disappeared, ISDA data show.

Sovereign CDS Spreads in EuropeIMF
Our generalised variance decomposition analyisis does not suggest strong direct spillovers from the euro area periphery. The significant drop in the CDS spreads between July 2012 and December 2012 was mainly driven by a decline in risk aversion as suggested by the model’s out of sample forecasts.

Benefits for EU Migrants: Brussels Warns Germany against Populism - Spiegel
Officials in Brussels have been highly critical of a German provision that limits access by EU nationals to its unemployment benefits. In an interview, EU Commissioner László Andor criticizes "unscrupulous politicians" seeking to foment populism.

French Economics Minister: 'There Is No German Model for France'Spiegel
Moscovici discusses President Hollande's decision to implement structural reforms, his friendship with Wolfgang Schäuble and criticism of France he believes is unjust.

Insights: Nordic household debtNordea
Denmark clearly has the highest debt-to-income ratio, and Finland has the lowest one. At first glance the data seem to indicate an alarming situation for Denmark, but it is important to take into account household assets.

EZ business-cycle
While the euro has had some impact on business-cycle synchronisation in the Eurozone, it has done so not through increased intra-regional trade intensity, but rather through some other channel – most likely financial integration.

Russia Faults Europe as Ukraine Opposition Seeks BackersBB
The Russian government accused the West of helping foment unrest in Ukraine as the country’s opposition leaders sought outside help at a conference in Germany and vowed to continue anti-government protests.

The History of the IMF and Greece’s BailoutWSJ
While euro zone and IMF officials secretly debate how to deal with Greece’s ever-controversial bailout, it might prove instructive to go back to the genesis of the program.

Charlemagne: The euro’s hellhoundThe Economist
It is time to reform the troika that handles euro zone bail-outs

Greece Is BackZH
Germany preparing new Greek aid package – SpiegelEkathimerini
Germany, France, Creditors Hold Secret Meeting Due To Greek Bailout "Mounting Concerns"

5 reasons the ECB will act in the months aheadSober Look
Liquidity, credit, monetary aggregates, disinflation

Bundesbank would favor end of sterilization to boost liquidity in bank systemWSJ
The Bundesbank would favor an end to the ECB’s policy of withdrawing large amounts of money from the banking system to offset its government-bond holdings, a person familiar with the matter said.

Main features of the 2014 EU-wide stress testEBA
2014 EU-wide stress test FAQEBA

Europe’s Stress Tests: A Cheat’s GuideWSJ

ECB Seeking to Unmask Weak Banks Wants Risky Loan DetailsBB
The information may give the ECB, which takes over supervision of the euro-region’s banks in November, a clearer view of diverging national practices in defining bad loans and allow for better comparison across the euro area. The deadline for submission was Dec. 31

Setting the examThe Economist
The hope is that the next round of stress tests, due to be conducted later this year, will turn out to be more of a success. A lot is riding on that. The frailty of banks has been a consistent theme in the euro crisis

European Banks Face 5.5% Capital Hurdle in EBA Stress TestBB
The exercise, which will examine a sample of 124 banks that cover more than half of each EU member state’s banking industry, is scheduled to begin around the end of May

ECB deflation risk denial has echoes of 2009Reuters
It may be true that the euro zone is further away from deflation now than it was in 2009, not long after a historic crash in stock markets around the globe. But waiting for deflation to set in while hoping for a different outcome could derail an already very fragile economic recovery.

There are Economic Jitters on Both Sides of The Old Iron CurtainWSJ
Deflation, thus, is spreading from the euro zone to Eastern Europe and then bouncing back again. That will only be made worse if eastern European defaults rise as they become unable to pay back their ballooning–in local currency terms–debts to western European banks.

More pressure on the ECB from low inflationDanske Bank

Inflation back to October-lowsNordea

European Unemployment By CountryZH

Fed draws criticism from abroad as emerging markets still reelingReuters

Two monetarist cheers for Ben BernankeThe Telegraph
Bernanke, despite his mistakes, is one of the great figures of our age

The January Barometer, by the NumbersWSJ
The Dow Jones Industrial Average’s performance in January has predicted the outcome of the full-year direction in 87 of 116 years, or 75% of the time, according to WSJ Market Data Group

Emerging Markets Inflow Numbers Point to Exit by Bond InvestorsNYT

Emerging Market Rout May Signal ‘Sudden Stop’: Cutting Research BB
Brazil, South Africa, Turkey and Ukraine are the emerging markets most at risk of a “sudden stop,” in the view of Morgan Stanley. That’s defined as a halt or even a reversal in capital flows into a country, slashing access to international financial markets for an extended period and weakening the economy.

Have EM outflows only just begun?alphaville / FT
SocGen’s cross-asset research team believes so, especially given the Fed doesn’t appear to care about the EM sell-off. If it keeps going, balance of payments issues could emerge as a result

How To Trade The Emerging Market MeltdownZH
SocGen: it makes sense to go fully defensive in all asset classes.

China’s Risky Credit BoomProject Syndicate
Credit in China is growing at a breakneck pace, raising serious concerns about the level of risk in the financial system. The government now must determine how to balance the economy’s liquidity needs with protecting the system's solvency.

Emerging threat or opportunity?The Economist
A useful rule of thumb is that emerging markets are attractive when they are out of fashion and trade at a discount to developed market equities. Both conditions are satisfied; Goldman Sachs says EM shares trade at a 25% discount to developed equities, compared with a 10% premium in 2007

Emerging market funds lose $9 billion in past weekReuters

Submerging markets are not the norm (so far)Long-short / FT
People have grown used to the idea that Turkey is a stable country and a good place to do business. They are now shocked to find they may have been a little over-optimistic – but that does not mean we are in a re-run of 1997 (at least not yet). The other emerging markets hit by the recent currency turmoil have a common factor: they run current account deficits.

EM Currency: The Common Risk Factor in Emerging MarketsJournal of Investing
The major EM benchmarks, whether debt or equity, are all driven by a common risk factor - the EM currencies

EM: the kevlar-gloved takealphaville / FT
BNP: one could argue that more needs to be done but we can’t say we have not seen a policy response. Rate hikes in EM are now either being delivered (and sometimes aggressively so) or priced in as the rates markets have sold off.

EM: Don’t PanicThe Economist
There is no reason for a broad emerging-market crisis. But nervous investors could yet cause one

EM rout? Or Intervention Sunday?Humble Student
On one hand, the bulls should be aware of the possibility of an emerging market currency crisis is very real and we could see a real rout in asset prices starting with EM assets. On the other hand, the markets are setting up the pre-conditions for massive intervention.

Emerging Markets’ Victimhood NarrativeView / BB
Talking Troubled TurkeyKrugman / NYT
Who’s to blame for the emerging-market crisis?Felix Salmon / Reuters
Neither Krugman nor Rodrik is blaming the Fed for causing the emerging-market bubble in the first place…The trick to preventing sudden stops isn’t to keep the money flowing: the trick to preventing sudden stops is to not make yourself susceptible to them in the first place.

Latest developments in Venezuela - a crisis in the makingSober Look

Thailand: A bloody election awaits SundayNordea
The extraordinary election on Sunday may end in bloodbath, as protesters will try to block the vote. Police and pro-government groups will strike back to support the administration. Even in the absence of a collision, the political crisis is unlikely to be solved after Sunday and downside risk to the THB remains large.

February Sentiment SummaryThe Short Side of Long
Individual investor optimism has just started to scale back * Despite a sell off, retail investors are plowing money into stocks * Volatility Index (VIX) has finally broken out to the upside! * According to NYSE, investor leverage climbed to a new record * Merrill Lynch Fund Manager Survey shows bonds still disliked * After 7th consecutive monthly outflow, retail investors are back! * Hedge funds are now going through a Long Bond short squeeze * Commodity exposure by funds remains unchanged through Jan * Hedge funds have turned net short on Sugar prices again * Speculator are holding net long positions on the US Dollar * Hedge funds continue to increase PMs net long exposure

How Rothschild Sees The FutureZH
Further monetary 'experiments' are becoming less probable. However, significant imbalances and risks persist.

Has Monetary Cooperation Broken Down?PIIE

Why the leaders of the two largest developed economies are begging companies to raise payQuartz

Will robots steal our jobs? The humble loom suggests not.WaPo

Laillisuudesta luopuminenTyhmyri
Olli Rehn ja EU:n jo vallitseva ja mitä ilmeisimmin vahvistuva periaate

Euron todellisuuttaTyhmyri
Kuoleman suudelma keskiluokalle ja vientivetoisen toipumisen valhe

Talouskriisin hoitoa islantilaisittainValtteri Aaltonen / US

EU ja työvoiman vapaa liikkuvuusBrysselin kone / YLE
Hallitusneuvos Olli Sorainen Työ- ja elinkeinoministeriöstä sanoo, että EU:ssa Suomi ei ole mikään työperäisen maahanmuuton suurmaa ja hekin jotka meille tulevat lähtevät täältä helposti pois.
Mutta entä tulevaisuudessa? Kuinka paljon työperäistä maahanmuuttoa meillä tulee olemaan ja kuinka paljon me sitä tarvitsemme?

Talousmaaottelu Suomi vs. 12 euromaataSijoitustalous

Katainen: Säästöjen arvioiminen on perusteltuaYLE
Afrikan-matkaltaan palannut pääministeri kommentoi hallituksen riitaa tulevista säästöistä lähettämällä tiedotteen. Myös Kataisen mielestä on perusteltua arvioida, miten säästöt jaksotetaan ja minkälaisia vaikutuksia verojen korotuksilla ja leikkauksilla olisi.

Työpaikat tai palkat – mankeli odottaaJan Hurri / TalSa
Sisäinen devalvaatio ei onnistunut viime lamassa, eikä sen onnistuminen ole nytkään varmaa. Se on kuitenkin tiedossa, että Suomen kustannuspaine on kasvanut eikä hellittänyt. Moni meitä rujommin kriisistä kärsinyt maa on pakosta karsinut kuluja, ja on ainakin tilastoissa kohentanut kilpailukykyään. Suomelta maali karkaa, mutta ennen pitkää meilläkin mankeliin joutuvat työpaikat tai palkat tai molemmat.

Nyt leikkauksia vihataan - hyvä niinHenri Myllyniemi / US

Pääkirjoitus: Kataisen uskottavuus koetuksellaIS

Pääkirjoitus: Kovaa nimeä etsittiin, mutta Jungner saatiinIS

Talousprofessori: Suomelta puuttuu idea valtionvelan hillitsemisestäYLE
Hallituksen mukaan Suomen valtion velan kasvun taittaminen vaatisi kolmen miljardin euron lisäsäästöjä, joista puolet koottaisiin menoleikkauksilla ja puolet veronkorotuksilla. Valtiovarainministeri Urpilainen kuitenkin väläytti valtion velkaantumisen taittamisen aikatavoitteen harkitsemista uudelleen.

Talouspolitiikan kimurantti tilanneSoininvaara

Demarit ja talouskriisiTyhmyri
Urpilainen ja järkevä talouspolitiikka

Jos se vaakkuu kuin ankka ja vaappuu kuin ankka...- Hannu Visti

Tuleeko poliittinen riski takaisin valtionyhtiöihin?TalSa
Poliittinen valta voi tehdä paluuta valtion yritysomistuksiin. Mitä tämä merkitsisi sijoittajien kannalta? Pitääkö valtion ylipäänsä omistaa pörssiyhtiöitä?

Nyt leikkauksia vihataan - hyvä niin Henri Myllyniemi / US

Ehdottaako Jutta Urpilainen finanssipoliittisen lain rikkomista?Sami Miettinen / US

Lisää enteitä asuntomarkkinoille Tyhmyri
Asuntolainan saajat vähissä

Italian työllisyys ja teollisuuden kehitysTyhmyri
Todelliset luvut kuin painajaisesta

Asuntolainakannan kasvu pysähtyi joulukuussa 2013 – Suomen Pankki
Bruttokansantuote supistui yhden prosentin vuonna 2012 – Tilastokeskus
Kotitalouksien rahastosijoitukset suurimmat neljään vuoteen – Suomen Pankki