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Tuesday, December 9

9th Dec - Greece & China in headlines

Previously on MoreLiver’s:

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Why is the UK banking system so big and is that a problem?BOE
While size can be important, it is the resilience of the banking system that is key for financial stability.

Eurogroup Statement on the Draft Budgetary Plans 2015EU

SNB Threatening Negative Rate Awaits Draghi’s Next MoveBB
Policy makers at the Swiss central bank have pledged numerous times to “immediately” supplement their three-year-old cap if needed, with options including a charge on sight deposits.

Sweden’s Riksbank responds to the criticsFT
Central banking is really hard and that the Riksbank’s actions are just as defencible — or indefencible — as those of most other rich world central banks.

France warns Germany to watch its wordsFT
France’s finance minister: criticising France’s economic policies fuelling the rise of anti-EU populists.

Arguments for and against EU enlargementDebating Europe

Eurozone Needs Further Labor Market Reforms, Says IMFWSJ

It's Time to Start Paying Attention to Greece Again – Businessweek
Greek premier calls snap presidential election – FT
Greek Markets Tumble as Samaras Risks Early Elections – BB
Why Greece Still Haunts the Eurozone – WSJ
More agony in AthensTradingFloor
Greek and peripheral bond yields snap higher – TradingFloor

Greece: Heading for the exitNordea
Greece is back to cause market tremors. The country risks falling back into political vacuum, which could once again raise questions about the country’s future in the single currency. Greece still has the potential to cause uncertainty far beyond its own borders, meaning volatility is set to pick up, as year-end approaches.

What’s “catch a falling knife” in Greek?FT
A snap presidential election — and the chances of Syriza coming into power if the government fails to win enough support to push its candidate through — are all it took to push the ASE down over 10 per cent on Tuesday.

Will Greek Political Instability Renew Existential Doubts about EMU?Marc to Market
As difficult as it is for Greece inside EMU,  it would be worse to drop out.  Dropping out of EMU appears to be a pre-condition for, and necessitate, default.

Which euro area countries have been driving household spending growth?FT
Notice the turnarounds in Spain, Italy, and other countries on the so-called “periphery”

Spanish house prices continued their climb in Q3TradingFloor

Russia's Ruble Disaster in One ChartBB
Russia Bond Yields Surge to 5-Year High as Rate Pressure MountsBB

The Russian Economy Is Heading toward DisasterPIIE
President Vladimir Putin’s annual address to the Russian Federal Assembly in the Kremlin on December 4 occurred in the midst of a perfect financial storm, which he largely ignored. His unspoken main message was that no economic reforms would take place. But the speech might have been his last opportunity to use reforms to save his regime from the financial turmoil that has just started.

Banks to only take 130 billion euros at second ECB TLTRO: tradersReuters

The ECB and QE in the Last Chance SaloonGeorge Magnus

ECB blamed for covered bond shortageFT
Covered bond supply has reached its lowest level in nearly two decades as the ECB has been accused of crowding out investors from the market by pushing up prices and depressing yields.

European Central Bank loan auction set to miss targetFT
Analysts expect banks to take €170bn of a possible €317bn
ECB considering tighter rules for emergency fundingReuters

Europe's banks face tough year in 2015, ratings agencies sayReuters
"The European bail-in tool decreases the predictability of state support," said S&P managing director Stefan Best in a separate presentation on banking prospects.

Peter Praet: Current issues in monetary policyECB

Fed ‘Considerable Time’ Rate Pledge Under Scrutiny Ahead of FOMCBB

Fed Updates Ahead of FOMC MeetingTim Duy’s Fed Watch
Fed is still positioning to begin normalizing rates in the middle of 2015. The data is less of an impediment with each passing day. The time to eliminate the "considerable period" language is fast approach. The press conference calendar argues for next week. Honestly, I hope they will skip this meeting in favor of the January meeting just to prove that every FOMC meeting is a live meeting. Alas, I think they believe they need the press conference to temper any adverse reactions from market participants.

Fed has considerable trouble updating guidance on interest ratesFT
A number of officials think “considerable time” is still doing useful work, as it signals rates are unlikely to go up at the next meeting or two. Others dislike referring to any fixed period of time.

China's stock mania decouples from economic realityThe Telegraph
The stock boom comes as Chinese industry battles with massive overcapacity in everything from steel to shipbuilding, coal output, cement and solar panels

China's resolutions for 2015TradingFloor
Chinese leaders are meeting this week to determine the policy blueprint for the economy in 2015. Covert fiscal spending and monetary easing are almost certain to continue under the guise of “flexibility”. A new tilt towards regional investment, a tougher stance on environmental protection, and fewer restrictions on overseas investment in financial markets are also on the cards.

PBOC Tightens FX & Slashes Collateral Availability; Yuan Crashes Most Since 2008 – ZH
China bond yields spike after corporate debt market crackdown – Reuters
5 Reasons China’s Stocks Are Tanking – WSJ

Japan’s voters see no alternative to Abe and his reflation planFT
Lack of enthusiasm for Abenomics aside, there is even less appetite to abandon it halfway through

Australia’s collapsing yield curveFT
Australian Business Confidence at 16-Month Low as Rate Cuts SeenBB

Daily Central BanksWSJ
Hilsenrath’s Take: Here’s How to Read A Patient Fed * As Fed Gets Set to Meet, “Considerable Time” Takes Focus * Fed’s Lockhart Still Favors Mid-2015 for First Fed Rate Increase * Mid-2015 Liftoff Still ‘Reasonable Guess,’ Fed’s Williams Says * China Markets Plummet

Daily MacroWSJ
In China, where years of overleveraged investment is now being tested by a slowing economy, a shift in collateral policy by an official clearinghouse organization prompted the biggest decline in Chinese shares for six years and a record-breaking plunge in the yuan. In Greece, political uncertainty is roiling markets and spilling over into the rest of the eurozone. Once again, this small eurozone economy is poised to put the monetary union to the test. Into this environment, the Federal Resrerve is preparing to signal next week its progression toward an increase in interest rates.

Danske DailyDanske Bank

Nordea MorningNordea
Moody’s affirms Swedish Aaa rating with stable outlook * Fed may drop “considerable time” phrase

FI Eye-Opener: Long live the bullsNordea
Bond yields with sizable falls again – bonds to remain supported. Intra-Euro-area spreads widen – more volatility ahead. Oil prices still in free fall. Equities retreat. Nowotny boosting QE hopes. Greek uncertainty adding to volatility before year-end. UK industrial production and US small business optimism. US and Austrian issuance.

A Day of ReversalsMarc to Market

It Wasn't Only China: Here Is What Else Is Crashing Overnight

Daily Shot: Energy is the new sub-primeTradingFloor
Energy funds becoming "toxic assets" * Australian dollar in free-fall * Equity investors turning to retail shares

From the floor: China's Shanghai Composite down 5%TradingFloor
Volatility in China equities is offering an increasingly attractive environment for traders even if the Shanghai Composite came off by 5% overnight. Meanwhile, the USDJPY uptrend is correcting, and today could be a headache for Tesco.

Global Central Bank Focus: The Great Escape​​PIMCO
Over the longer term, portfolios should be positioned for low policy rates not only in the U.S., but also in Europe and Japan.

Follow the Swiss for reserve management successFT
Carefully controlled diversification of central bank assets makes sense

Central Bank Balance SheetsMarc to Market
Does the expansion of a central bank's balance sheet let us forecast currency movement?  It is not immediately clear.  It depends on where one begins the story.  

What the Strengthening Dollar Means for Emerging MarketsWSJ

Kiinan kasvu hyytyy, mutta pörssi kuumenee * Saksan teollisuustuotanto vaisua * Kreikan presidentinvaaleja aikaistettiin

Raimo Sailas: Euroopan näivetystauti näyttää pitkittyvän HS

Joka neljäs suomalainen haluaa markan takaisinIL
Koskenkylä: euroalue ei ole toimiva, se oli suuri virhe. Nyt sen myöntää yllättävän moni.

Suomalaispankeille miljardin lasku kriisirahastostaKL
Valtioneuvoston arvion mukaan Nordea maksaisi rahastoon seuraavan yhdeksän vuoden aikana 450-850 miljoonaa euroa. Todennäköisimmin summa olisi haarukan yläpäästä.

Euroopan vakausmekanismi voi alkaa rahoittaa pankkejaHS

Ensiasunnon ostajien määrä vähentynyt vuodesta 2006 lähes 40 prosenttiaTE

Duunarin etu on oma valuuttaKaj Turunen / US
Visiota Suomen EU ja eurojäsenyydestäSirpa Abdallah / US

Ruotsin ja Suomen vaalikevätJussi Halla-aho

EK: Rohkeat säästöt ja palkkaverojen reipas alentaminenVerkkouutiset

Mamutaustaisten nuorten turvallisuuskokemukset HelsingissäHEL
Nuoret maahanmuuttajanaiset kokevat olonsa Helsingissä muita turvattomammiksiYLE
Yle uutisoi vajavaisesti maahanmuuttajanuorten peloistaProfessorin ajatuksia