Here are the ”best” from my
posts of the ending week. Last week’s edition here.
Previously
on MoreLiver’s:
W/E: Weekly Support (updated)
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EUROPE
Comfortably numb: ESM direct recapitalization
– Bruegel
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.
Euro area macro
monitor – Danske
Bank
The euro area recovery is currently driven by domestic
demand, as the global slowdown in Q1 resulted in weaker export growth.
Nordic Outlook June
2014 – Danske
Bank
Denmark: We have been waiting for a long time but at long
last the recovery seems to be taking hold * Sweden: The Riksbank is set to cut
the repo rate and keep it ultra-low for ultra-long * Norway: Oil investment
likely to hurt GDP growth, we expect slower growth due to lower growth in oil
but still high levels of activity * Finland: The third year of decline, still
trapped in recession but should recover in 2015
FISCAL RULES
The EU’s New
Stability & Growth Spat – WSJ
Euro-zone governments have returned to one of their
favorites topics: Do the bloc’s spending rules — which limit national budget
deficits to 3% of gross domestic product -- hurt growth?
Europe needs new investment, not new rules – Bruegel
In my view, the EU must avoid another useless fight over its
fiscal rules and instead use political capital to foster growth. A deal could
be designed along 3 central elements.
Merkel versus Renzi for the future of the eurozone
– FT
Wolfgang Münchau: Rome’s
demand for a fundamental rethink of the fiscal rules sets the scene for a
political tussle
BANK OF ENGLAND
Financial Stability Report, June 2014 – BoE
Bank of England imposes first limits on size of UK
mortgages – Reuters
The FPC’s Financial Stability Report seems like a paper
tiger – TradingFloor
UNITED STATES
Inflation Hysteria
– Tim
Duy’s Fed Watch
Tighter policy is coming. If you are worried the Fed will
accelerate the timing and pace of tightening (and I do believe the risk is
weighted in this direction), your focus should be on the labor market and wage
growth dynamic.
Economists React to Q1 GDP Revision: ‘Different Shades of
Nasty’ – WSJ
U.S.
economy collapses in first quarter, but growing again – Reuters
U.S.
Economy Shrank in First Quarter by Most in Five Years – BB
Consumer Inflation Hits Highest Level Since 2012, Near Fed’s
2% Target – WSJ
ASIA
5 Takeaways from Japan’s Growth
Strategy – WSJ
The Long and the
Short of China’s Economy – WSJ
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
PMIs show Asia rebounding and Europe stalling – TradingFloor
The June purchasing manager indices show a subtle, but
important change of heart. Japan's
and China's
numbers turned positive, which is critical for the rest of the world economy.
While France
disappointed again, that is not news. Germany's
service sector giving away the May gains is of little importance. The fact that
Europe is dependent on Asia's
growth makes Europe's outlook further down the road more
positive than today's numbers would suggest.
Global Economics
Quarterly – Credit 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.
International
spillovers from unconventional monetary policy easing and exit - what do we
know? – BIS
Remarks by Mr Seppo Honkapohja, Member of the Board of the
Bank of Finland, in the panel session "Unconventional Monetary Policy and
Its Reversal: Policy Options for Growth and Stability", Asian Economic
Panel, Helsinki, 9 June 2014.
The Fund's Lending
Framework and Sovereign Debt– IMF
IMF Seeks a
“Reprofiling” Middle Ground Between Bailouts and Defaults – WSJ
IMF Girds for Market
Storms Ahead – WSJ
New Financial Forecasts – Nordea
Summary here.
FINNISH
Demokratia ja markkinatalous eivät ole sama asia – Tyhmyri
Länsimaisen
demokratian uusi haste
Euro heikentää teollisuuden
tuottavuutta – Tyhmyri
Eurokriisi ja
pysyvät taloudelliset vahingot