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Thursday, June 26

26th Jun - BoE's stability report, bad US macro

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Self-fulfilling Eurozone debt crises and the ‘Draghi put’VoxEU
Like banks, indebted governments can be vulnerable to self-fulfilling financial crises. This column applies this insight to the Eurozone sovereign debt crisis, and explains why the ECB’s Outright Monetary Transactions policy reduced sovereign bond spreads in the Eurozone.

The Burden of Nonperforming Loans on Credit in the Euro AreaIMF
High and rising levels of nonperforming loans in the euro area have burdened bank balance sheets and acted as a drag on bank profits. Banks, striving to maintain provisions to cover bad loans, have had fewer earnings to build-up their capital buffers. This combination of weak profits and a decline in the quality of bank assets, resulting in tighter lending standards, has created challenging conditions when it comes to new lending.

Financial Stability Report, June 2014BoE
Live blog: Bank of England financial stability report – FT
Bank of England imposes first limits on size of UK mortgages – Reuters
The FPC’s Financial Stability Report seems like a paper tiger – TradingFloor
London gets a monetary policy – FT
BOE Questions Fall In Euro-Zone Bond Yields – WSJ
BOE Warns of Complacency on Liquidity Risks – WSJ
This is nuts. Where’s the liquidity? – FT

The EU at a Migration CrossroadsWSJ
European Commissioner for Home Affairs Cecilia Malmström talks to WSJ about migration policy in the midst of what's set to be a record year of refugee arrivals.

International trade in services: EU28 surplus up to €173 bn in 2013 – Eurostat

Worst quarter since the Great Recession. Here’s why you shouldn’t worryWaPo

The Reality of Student Debt Is Different From the ClichésNYT
What the New Numbers on Student Debt Really SayBusinessweek

Monetary Policy in the United States: A Brave New World?FED
A reflection on monetary policy in the United States during Ben Bernanke’s two terms as Chairman of the Federal Open Market Committee, from 2006 to 2014. Inflation targeting, policy during the financial crisis, and post-crisis monetary policy (forward guidance and quantitative easing) are discussed and evaluated.

Fed’s Lacker: Much Labor Market Slack Remains Due to Structural Issues – WSJ
Fed’s Bullard Not Worried by GDP Drop – WSJ
Fed’s Bullard: Fed Policies Have Not Fueled Income Inequality – WSJ

Consumer Inflation Hits Highest Level Since 2012, Near Fed’s 2% Target – WSJ
PCE Price Index: Headline and Core Remain Below Target, But Continue Rising – dshort
Fed's Key Inflation Indicator Hits 19-Month High – ZH

Personal Spending Disappoints For Two Out Of Three Months In Q2 – ZH
Personal Income increased 0.4% in May, Spending increased 0.2% - Calculated Risk
The Latest on Real Disposable Income Per Capita – dshort

Treasury Yields Hit 3-Week Lows As Stocks Near Record Highs – ZH
Stocks Slump As Fed's Bullard Warns The Market Is Wrong – ZH

The Long and the Short of China’s EconomyWSJ
Mr. Pettis fears that the “perpetual rolling-over of bad loans [could absorb] most of the country’s loan creation capacity.” At that point, Beijing would risk losing control of growth altogether—and the hoped-for soft landing could turn hard, and fast.

Daily Macro WSJ
How does the optimism square with the fact that May durable goods orders were down 1%, well below expectations? Perhaps the old bad-news-is-good scenario is in play, where investors are betting that poor data will spur the Federal Reserve to either boost stimulus or slow the wind-down of quantitative easing. But in reality, the Fed’s program to pare back its still generous bond-buying program is on autopilot and there’s not much more it can do to slow it down or speed it up.

Daily Central Banks WSJ
Hilsenrath’s Take: The Quirky Arithmetic of First Quarter’s GDP Plunge * OCC Warns Signs of Credit Risk Building in Banking System * Fed’s Tarullo Says Bank Stress Tests Will Be Part of Year-Round Supervision * China Expands Trial to Liberalize Foreign-Currency Deposit Rates

Dollar Mixed, Sterling Recovers Marc to Market

Global Economics QuarterlyCredit Suisse
Slowing global growth, low developed market inflation, and falling US and European interest rates were all evident in the first half of 2014. But we think the world is reaching turning points in growth, inflation, and – yes – monetary policy.

Fixed income risk appetite headed for euphoriaSober Look
This yield compression is not limited to bonds… The longer the current environment persists, the more difficult it will be for central banks to begin rate normalization.

Commodities: Insurgence puts great Iraqi potential at riskDanske Bank
All eyes in the oil market have turned to Iraq following the recent insurgence

Suomen ongelma on piilokorruptioTalSa
Suomessa etenkin rakennus- ja kiinteistöalalla on korruptiota, konsulttiyhtiö Ernst & Youngin kyselystä selvisi.

Työajan pidennyksellä, eläkeiän nostolla, vastikkeellisella työttömyysturvalla ja perustulollako Suomen ongelmat kuriin?Professorin ajatuksia

Näissä Suomen suurkaupungeissa asunnot ovat alkaneet halventuaTE

Stubbia "inhottaa" brittikonservatiivien ja perussuomalaisten liittoIL

Kesäkuun kannatusarviot: Kokoomus kärjessä,  SDP vajonnut historiallisen alasYLE

Vähittäiskaupan pikaennakko: myynti laski toukok. 1,4% YoY – Tilastokeskus
Asuntovelkojen kasvu pysähtynyt – Tilastokeskus