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EUROPE
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 Area – IMF
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 2014 – BoE
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 Crossroads – WSJ
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
UNITED STATES
Worst quarter since the Great Recession. Here’s
why you shouldn’t worry – WaPo
The Reality of Student Debt Is
Different From the Clichés – NYT
What the New Numbers on Student Debt Really Say – Businessweek
FEDERAL
RESERVE
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
MACRO
NUMBERS
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
ASIA
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.
OTHER
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
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 euphoria – Sober
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 risk – Danske
Bank
All eyes in the oil
market have turned to Iraq following the recent insurgence
FINNISH
Suomen
ongelma on piilokorruptio – TalSa
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 halventua – TE
Stubbia
"inhottaa" brittikonservatiivien ja perussuomalaisten liitto – IL
Kesäkuun
kannatusarviot: Kokoomus kärjessä, SDP
vajonnut historiallisen alas – YLE
Vähittäiskaupan pikaennakko: myynti laski
toukok. 1,4% YoY – Tilastokeskus
Asuntovelkojen kasvu pysähtynyt – Tilastokeskus