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Friday, July 11

11th Jul - W/E: Roundup of the world's week

Due to holidays and lack of daily posting, here are the articles and events of the ending week that I wanted to make a note of.

Is There A Right To Secede?Project Syndicate
The EU has brought 28 countries into a closer political and economic union. Paradoxically, it has also made it more feasible to contemplate the breakup of some of those countries.

Brussels round upEuropp / LSE
Cannabis use across Europe, EU banking, and who will get the EU’s remaining ‘top jobs’?

Europe’s Debt WishProject Syndicate
Kenneth Rogoff: It is difficult to see how Europe can revive economic growth without significant debt restructuring or rescheduling. But Europe’s politicians seem utterly unable to contemplate this scenario, thus placing a huge burden on the ECB.

Opinion: Watch Out for Little Green MenSpiegel
When Moscow-backed troops appeared in Crimea earlier this year, the media dubbed them the "Little Green Men." Now NATO members should ask themselves how they will respond if the soldiers begin appearing in Estonia and Latvia too.

Think the Bundesbank’s Buttoned Down? Witness the BubapaloozaWSJ

Hollande’s Danish spectaclesMarket Monetarist
Is France the next trouble spot in the euro zone?

Juncker begins to fill in the gapsReuters
European Commission president-elect Jean-Claude Juncker will hold talks with the various political groupings in the European Parliament as he seeks to develop policy positions. Most interesting would be indications about which way he is bending in the growth versus austerity debate.

Could the discussion on EU fiscal rules still endanger Juncker's election?Open Europe

Juncker's first moveBruegel
The incoming President of the European Commission should show he means business by rationalising the college of Commissioners

Juncker’s Make-or-Break PresidencyProject Syndicate
It is possible that Jean-Claude Juncker, once he is confirmed as European Commission President, will confound his critics and become the radical reformer that the EU needs and public opinion wants. Pro-Europeans should hope so, because the next few years look like a make-or-break period for the entire integration project.

Juncker: The next Econ/Monetary Commissioner will be a Socialist – Open Europe
Juncker denies belief in ‘United States of Europe’ – FT
Juncker wants 'fair deal' for Britain – euobserver
Juncker Doesn’t Want Dijsselbloem for Next EU Economics Chief – WSJ

Blogs review: The EU-USA Transatlantic Trade and Investment PartnershipBruegel
The European Union and the USA are currently negotiating a free trade agreement, known as the Transatlantic Trade and Investment Partnership (TTIP). After a draft has been leaked to the public, an intensive public debate over possible advantages and disadvantages of such a deal has erupted. While there is some debate over how large the economic benefit of such a free trade agreement can be in face of already relatively low trade barriers between the EU and USA, critics claim that the deal will lower standards of consumer protection, provision of public services and environmental protection in the EU.

EU wants a piece of America’s fracking boomWaPo
The European Union is pressing the United States to lift its longstanding ban on crude oil exports through a sweeping trade and investment deal, according to a secret document from the negotiations obtained by The Washington Post.

ECB remains long on words, short on action – TradingFloor
Factbox: How does the ECB's four-year loan scheme work? – Reuters

ECB Summons Bankers for Catch-Up as Stress Test Looms – BB
ECB watchdog says bank safety checks running according to plan – Reuters
Exclusive: ECB keeps banks on tight leash with October test results – sources – Reuters
ECB looks to banks to deliver quantitative easing on its behalf – Reuters
ECB Plans to Limit Stress-Test Inputs in Bank Checks – BB

ECB's Coeure: rates to stay low, Europe needs more investment – Reuters
ECB’s Cœuré: The eurozone is like a grueling triathlon – Craig Willy
ECB's Coeure: rates to stay low, Europe needs more investment – Reuters

Draghi Backs Coeure in Call for Europe-Level Reform Push – BB
Don't stretch budget rules too far, ECB's Coeure tells EU – Reuters
Draghi urges euro zone states 'to be sovereign together' – Reuters
Draghi Says Europe Needs Higher Powers as Leaders Quarrel – BB
Draghi coaxes politicians to lead reforms – FT

Nowotny Sees No ECB Urgency for Action as Stimulus Bites – BB

Has the ECB backed German ‘reform contracts’ for the eurozone? – Open Europe

Can Anything Halt European Deflation? – WSJ
Great Graphic: Disinflation or Deflation in Europe? – Marc to Market

ECB Puts Numbers On Gains From Economic Reforms – WSJ

Statistics Pocket Book, July 2014 – ECB
Monthly Bulletin, July 2014 – ECB

The Phillips curve relationship in the euro area – ECB
SME access to finance in the euro area: barriers and potential policy remedies – ECB
Euro area risk-free interest rates – ECB

UK Economists Back Action on House Prices Risks – WSJ
BOE Raising Rates Too Soon Risks Denting Recovery, BCC Says – BB
U.K. to Fight for City of London in Court Clash With ECB – BB
U.K. Industrial Production Slides. Does It Matter? – WSJ
BOE Deputy Governor-Designate Shafik Says Slack Is Shrinking – BB
Pound’s Rally Becoming Burden, Goldman Sachs Says – BB
The capital adequacy of banks – BOE

Out of the euro but run by the euro? – Open Europe
The UK & ECB prepare to lock horns at the ECJ in what could be the most important case yet

Commerzbank Said Next to Face Penalties in U.S. Probe – BB
Is Germany Leading Euro-Zone Weakness? – WSJ

Europe Is Broken Again; Espirito Santo Halted – ZH
Espirito Santo: The Full Timeline – ZH
Portuguese Stocks Enter Bear Market – ZH
Portugal Leads Drop in Euro-Area Bonds on Espirito Santo Concern – BB
Europe’s Sell-Off: Analysts React – WSJ
Some Recent Euphoric Comments About PortugalZH
BES Resumes Trading, Surges Then Tumbles – ZH
Banco Espirito Santo: All The Latest News – ZH
What Analysts Are Saying About Banco Espírito Santo Now – WSJ
Temper tantrum, tempest, or teapot? – FT
What sparked yesterday's renewed concerns around the eurozone? – Open Europe
Portuguese Bank Reveals Exposure After Missed Payment Shakes Markets – BB
No Periphery Panic as Losses Pale Versus 2012: Chart of the Day – BB
Portugal Smolders as Allianz Says Crisis Isn’t Over – BB
Espirito Santo Turmoil Shows ECB's Challenge in Managing Systemic Risk – BB

Spain: Article IV Consultation – IMF
Spain: 2014 Staff Report; Staff Supplement; Press Release – IMF
Spain: Selected Issues – IMF
IMF Gets It Wrong Again – Simon Nixon / WSJ

Greece Resists Troika on Third Bailout as Draghi Protests Delays – BB

House prices down by 0.3% in the euro area – Eurostat
Four is a trend? – The Economist

Inflation Hysteria ReduxTim Duy’s Fed Watch
If you are making a short-term bet on higher headline inflation, primarily you are making a bet on energy and food.  That bet is about the Middle East and weather, not monetary policy.  I don't have an opinion on that bet.  If you are betting on inflation over the medium-term, primarily you are making a bet on higher core inflation. More to the point, you are betting against the Fed.  You are essentially betting that the Fed will not do what it has done since Federal Reserve Chair Paul Volker - tighten policy in the face of credible inflationary pressures. I would think twice, maybe three times before making that bet. 

When The Fed Starts Raising RatesTim Duy’s Fed Watch
I think the flattening of the yield curve should be a concern to the Fed.  It suggests that while we frequently hear Janet Yellen described as a dove, the expectation is 7that her actual policy approach will be cautious bordering on hawkish.

BIS Slams the FedMish’s
Ridiculous Question of the Day: "Is The Fed Going To Attempt A Controlled Collapse?"

The Fed shouldn’t try to pop bubbles. Just ask Sweden.WaPo

FT: Fed’s Reverse Repo in 60 secondsYoutube

New Tool from Atlanta Fed: GDPNowCalculated Risk

Did China Just Crush The US Housing Market?ZH

Financial Sector Reform: How Far Are We? – FED
Fed’s Fischer suggests including financial stability among chief goals – WaPo
Fed’s Fischer: Financial Sector Reform: How Far Are We? – Calculated Risk
Fischer worries about macroprudential policy – FT

Fed’s Plosser Says U.S. Policymakers Conflicted Over Risk Taking – WSJ
Plosser Says Fed Must Consider Higher Rates as Policy Goals Edge Closer – WSJ
Plosser Says Rate Increase Closer Thank Many People Think – BB
Fed’s Plosser: Federal Reserve Must Prepare Markets for Rate Increases – WSJ
Fed’s Lockhart Isn’t Convinced of Firmer Inflation Trend – WSJ
Fed’s Lockhart: Still Sees First Fed Rate Boost Some Time in 2015 – WSJ

What to Watch For in the Fed Minutes – WSJ
Minutes Show Fed Fears Investors Are Too Complacent; QE To End In October – ZH
Hilsenrath's "QE Is Dead, Long Live The Easy Policy" Summary – ZH
Bonds & Stocks Surge Despite Fed Warning Over Complacency – ZH
FOMC Minutes: QE3 Expected to End in October – Calculated Risk
Minutes show path to exit becoming more concrete – WaPo
Fed Stimulus Is Really Going to End and Nobody Cares – WSJ
Fed Has Little Uncertainty, Despite Forecasting Misses – WSJ
The Fed as universal banker – FT
Are Investors Complacent About Risk? Concern Raised in June Fed Meeting – BB
Fed Moves Closer to Choosing Main Stimulus-Exit Tool – BB
Fed mulls policy exit, eyes October end of asset purchases – Reuters
QEInfinity Not – Tim Duy’s Fed Watch
Creeping nationalization – Coppola Comment
Portugal’s Problems Aren’t a European Crisis – WSJ

End to China’s property boom has barely begunFT
George Magnus: Financial markets are having trouble pricing the implications

China’s shadow banking is risky, but how risky?FT
In China, shadow banking is a broad concern, given liquidity mismatches in the system, opaque asset quality and the fact that the end-users of such finance are often in the riskier sectors of the economy such as real estate and those struggling with over-capacity.

Economists React: China’s Exports Rise, But Not EnoughWSJ

Monday Daily MacroWSJ
Surprisingly weak German industry data, which is causing people to revise down their growth forecasts for the country. It’s a headwind euro-zone policymakers could do without. Elsewhere, Ukraine’s showdown with pro-Russian rebels and the ISIS insurgency in Iraq are simmering in the background without registering much market impact.

Monday Daily Central BanksWSJ
Blackstone’s Take: ECB’s Not-So-Targeted Loa7n Program May Still Deliver * Hilsenrath’s Take: Analyst Expectations for Fed Rate Hikes are Shifting * Robust June Hiring May Move Forward Likely Fed Rate Hike, Analysts Say * As Food Prices Rise, Fed Keeps a Watchful Eye * Banks Face Added Capital Requirements

Tuesday Daily MacroWSJ
Another day, another set of bad data from Germany. Yesterday it was weak industrial production numbers. Today, it’s declines in German exports and imports. But because imports fell by more than exports, the German outcome is bad news for its neighbors as well. Germany’s huge balance of payments surpluses, which have been running at more than 7% of GDP, were one of the root causes of the euro-zone crisis. Elsewhere, there are further signs of a softening tone to the global economy, including slipping business sentiment in New Zealand and a surprise fall in U.K. manufacturing.

Tuesday Daily Central BanksWSJ
Hilsenrath’s Take: Yellen Didn’t Rule Out Monetary Policy to Combat Bubbles * Fed Defends Its Approach to Punishing Banks for Improper Foreclosures * Is BOE Gov. Mark Carney’s Recovery for Real? * ECB Would Need Good Reason to Start Asset Purchases, Lautenschlaeger Says * Economic Growth Likely to Strengthen in India But Slow in Germany

Wednesday Daily MacroWSJ
All eyes will be on the minutes to the mid-June Federal Open Market Committee meeting, looking for signs of how soon policy might start to be tightened. Soft Chinese inflation, meanwhile, leaves scope for policy makers there to provide some stimulus to shore up a fast flagging property market.

Wednesday Daily Central BanksWSJ
Hilsenrath’s Take: Labor Market Converging More Rapidly Than Expected Toward Fed’s Objectives
* Fed’s Kocherlakota Sees No Urgency To Raise Short-Term Rates * Fed’s Lacker: ‘Middling’ Productivity Gains Will Restrain U.S. Economic Growth * Currency Reserves Swell in
Asia * Poland Still More Likely to Raise Rates Than Cut Them, Central Banker Says

Thursday Daily MacroWSJ
What happened to global industry in May? Weak output and production numbers released Thursday by 7Italy, France and Japan added to similar drops reported by Germany and the U.K. in recent days. It could be a strange, temporary effect. But it’d definitely be worth watching

Thursday Daily Central BanksWSJ
Hilsenrath’s Take: A War-Weary Fed’s Reluctant Embrace of New Weapon * Fed Sets October End for Bond Buying * Fed Officials Discussed Role for Interest on Reserves * China Central Bank Said Committed to Rate Reform * Draghi Calls for Euro-Zone Rules for Economic Reforms

Friday Daily MacroWSJ
After Thursday’s flurry of excitement triggered by banking problems in Portugal, markets settled down again on Friday. However bad the news is for Portugal, investors seem to have decided that the Espirito Santo Group’s woes aren’t going to reignite the euro crisis. More worrying, though, will be signs of economic weakness from across Europe and much of the rest of the world. May industrial production data released over the past week or so have been consistently gloomy. These data tend to be volatile, so it could be a temporary effect. But they’re so widespread it would be foolish to completely ignore the data.

Friday Daily Central BanksWSJ
Hilsenrath’s Take: Bond Dealers See Fed Rate Hikes Stopping in 2017 at 3.5% * Fed’s George Sees Room For Rate Hikes This Year * Partisan Divide Over Fed on Display in House Committee Hearing * Lawmakers Seek Disclosure of High Earners at Federal Reserve Banks * U.S. Says It Won a Victory in China Currency Battle. Did It?

June Economic UpdateShort Side of Long
Global manufacturing continues to expand, driven by DMs * China & BRICs continue to show below trend economic activity * US leading economic indicators remained positive in June * Michigan consumer sentiment still remains at multi year highs * European consumer confidence is persisting on the upside * Japanese household survey turns around as Nikkei rebounds… * South Korean exports are a great barometer of global economy *