Here are the ”best” from my
posts of the ending week. Last week’s edition here.
Follow ‘MoreLiver’ on Twitter
EUROPE
Even a billionaire
cannot save the EU from itself – Reuters
“Only in retrospect,” Soros writes, did he come to see the
euro zone as structurally flawed. It is vulnerable to shocks like the crash of
2008, it lacks common fiscal or political policies and its most powerful nation
— Germany — is
reluctant to take the bold steps that could secure the currency and the EU. The
ultimate failure of the euro zone project will be Germany’s
fault, he says.
BANKS
ECB Data Demands Called
Excessive by Banks Facing Asset Review – BB
Euro-area banks
urged the ECB to reduce the information they have to provide as part of a
review of their balance sheets because they say the demands are excessive.
Bankers fear leaks from ECB health check – Reuters
Bankers are worried
that sensitive information will leak out before the official publication of the
bloc's review of bank balance sheets, triggering speculation and making
investors uneasy.
Europe strikes deal to complete banking union – Reuters
Europe took the final step to complete a banking union
on Thursday with an agency to shut failing euro zone banks, but there will be
no joint government back-up to pay the costs of closures.
EUROPEAN CENTRAL BANK
QE Not the Only Option for
ECB on Inflation – WSJ
The solution is a
thorough cleanup of the banking system of the sort that the ECB is currently
orchestrating.
ECB needs cunning
plan to join currency wars – Reuters
The euro is at two-and-a-half-year highs, a strength that
could drive ultra-low inflation even lower. In principle, the European Central
Bank is squeamish about blatantly targeting a weaker euro. But it need have no
qualms about picking policy tools that maximise currency damage.
From firmly to weakly anchored, or the the
importance of an adverb! – Money
Matters
Having weakly rather
than firmly anchored inflationary expectations would have justified some action
to fortify them on the occasion of the last ECB Governing Council meeting.
Instead, if we take exchange rate movements as an indicator of inflationary
expectations, the strengthening of the € which followed the press conference in
March shows that, instead, the lack of action from the ECB has further weakened
the anchoring of inflation.
Squaring the Circle: A QE for the ECB – Marc
to Market
Perhaps the ECB can
learn something from the Swiss National Bank.
Recall that when confronting deflation a few years ago, the SNB's
ability to implement quantitative easing was limited by the fact that its
domestic bond market is too small.
Forced by circumstances, the SNB opted for buying foreign bonds…While
not constrained by size of the local bond market, the way the Swiss National
Bank was, the ECB is constrained in a different way. Buying foreign bonds appears to be a way to
square the circle.
UNITED STATES
Yellen and the Fed, a WSJ Briefing – WSJ
Free downloadable
e-book!
Fed Shouldn’t Use Rates to Target Bubbles,
Paper Says – WSJ
Fed officials have
started warming up to the notion that they might one day need to raise interest
rates to prevent dangerous asset bubbles from inflating too much. A new paper
has a simple warning: Don’t do it.
Special: FOMC Meeting
– MoreLiver’s
Five reasons why
the long-term jobless don’t matter to the economy – WaPo
Long-term jobless face a dark future in U.S.:
study – Reuters
The millions of
Americans suffering through long stretches of unemployment could be left behind
as the economy strengthens, a study by an influential former White House
economist found.
ASIA
China is
shaking, sending ripples from Perth to
Peru – George
Magnus
MARKETS
Global FX Strategy: EURUSD
will fall.. If US falls – Nordea
Will the EURUSD
fall, when Fed eventually starts its hiking regime? Not necessarily. Find our
thougths on that, as well as updated stories on GBP, CHF, SEK and NOK in this
edition of our monthly Global FX Strategy.
European FI Strategy: Not
another crisis – Nordea
Flight-to-quality
flows have pushed bond yields lower again, and risks remain tilted towards
lower yields, as tensions between Russia and the EU/US over Ukraine / Crimea
could easily escalate. On the central bank front, the ECB is struggling with a
strong currency.
Emerging Markets Briefer -
March 2014 – Danske
Bank
Geopolitics and
Chinese slowdown – a terrible cocktail
Distorted Markets & Disillusionment One
Asset At A Time – ZH
Citi’s Matt King:
reach for yield has distorted primary and secondary markets, forced risk-averse
investors into alternative asset classes, distorted markets beyond any
fundamentals, and left markets incredibly illiquid. This sets up a problem that
we are already seeing as investors are disillusioned one asset at a time.
Fund Managers' Current Asset Allocation –
March – The
Fat Pitch
What has been
particularly remarkable is how long managers have been highly overweight
equities (virtually all of 2013 and so far in 2014). This is longer than any
period during the 2003-07 bull market (yellow shading). In September, exposure
to global equities was the second highest since the survey began in 2001.
Industrial Commodities Update – Short
Side of Long
After a 3 year
downtrend, Copper is moving into a panic sell off * Brent Crude is at a
decision point and a breakdown looks likely!
OTHER
The Finance Macro Canon – Noahpinion
Stop me if you've
heard these one before: 1. Inflation is caused by increases in the money supply…
FINNISH
Komissio sumutti
itselleen lisää talousvaltaa – Jan
Hurri / TalSa
Suomen
eduskunnalle ja muidenkin EU-maiden parlamenteille on lähes pyhä asia, että
kansalliset budjettipäätökset pysyvät kunkin maan omassa vallassa. Silti EU:n
komissio on halunnut ja saanut tuntuvasti lisää talouspolitiikan valtaa.
Komission valtaa ovat kasvattaneet kriisi – ja silkka sumutus.
IMF:n loppulausunto
Suomen taloudesta
Tiivistelmä suomeksi – Suomen
Pankki
Alkuperäinen englanniksi – Suomen
Pankki
Euroopan
keskuspankin Kuukausikatsaus 3/2014 – Suomen Pankki