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Wednesday, February 25

25th Feb - Michael Pettis does another epic

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European Semester 2015: College decisionsEC

ECB's Coene says euro zone exit possible in theory: paperReuters
A country could in theory leave the euro zone if it wanted to, European Central Bank policymaker Luc Coene said, but he added that he could not imagine which nation would want to do so

When do we decide that Europe must restructure much of its debt?Michael Pettis
Few people realize PIIGS have effectively already restructured their debts with partial forgiveness, thanks to ECB’s “whatever it takes” in 2012.

Should EZ crisis countries worry about a reduced Greek primary surplus target?Bruegel

The Greek deal: What does it mean for Podemos?Open Europe

BOE Launches Search for Theories of Almost Everything – WSJ
The Bank of England is responding to change – FT
The BoE on fundamental digital change in central banking – FT
BOE Launches Search for Theories of Almost Everything Update – WSJ
One Bank Datasets – BOE

Greece’s Reprieve: In Praise of Kicking the Can Down the Road – PIIE
Ex FinMin Papaconstantinou’s trial on felony charges over Lagarde-List begins – KTG
Eurozone ok’s Greek reforms, ECB and IMF concerned about lack of detail – Open Europe
Greek Parliament is Key to New Starting Point – Marc to Market
ECB and IMF to Greece: No Escaping the Austerity Hairshirt – Yves Smith
Germany's Schaeuble: credibility of new Greek plan still in doubt – Reuters
Eurogroup's Wieser says Grexit was not on the table in talks – Reuters
Grexit not being discussed: Dijsselbloem – Reuters
Greece faces problems to pay in July, but Germany wants a 3. bailout – KTG

ECB’s Longer-Term Loans Expire With Three-Year Bond Rally Legacy – BB
Draghi’s statement to European Parliament – ECB

Simon Johnson: Obama Steps UpProject Syndicate
For the past six years, US President Barack Obama's administration has, more often than not, sided with the interests of big banks on financial-sector policy. But this week, announcing a new proposal to prevent conflicts of interest in financial advising, Obama seemed to turn an important corner.

Markets Exaggerate Yellen's Dovishness – Marc to Market
Yellen speech leaves USD bulls in the cold – TF
Warming up for lift-off - Yellen testimony review – Nordea
The Fed’s Own Stress Tests Aren’t as Stressful as Its Tests of Banks – WSJ
Yellen: Fed to Issue Bank Commodity Rules This Year – WSJ
Markets play chicken with Fed over rates – FT
Volatility to rise if Fed acts sooner than assumed by bond markets
Yellen defends central bank independence – FT

HSBC PMI improves in February, major distortions from Chinese New Year unlikely – Danske Bank

Behind the post-crisis rich-world bond market boomFT

The supply of corporate bonds has more than doubled since the precrisis period, with a little more than 80 per cent of that growth coming from a boom in the supply of highly-rated bonds.

In the long run we’re all chartedFT
BofAML’s 2015 look at long term trends in financial markets

USD: what’s fair anyway?Nordea
The normal pattern of the USD since the early nineties suggests appreciation ahead of the first Fed rate hike. The case for further appreciation is however less clear-cut today than three to six months ago. Various “fair value” approaches yield values between 1.00 and 1.22.

Buy Europe?Humble Student
When I first focused on the question of regional equity allocation, my first instinct was to think about the eurozone. Upon further study, the excessive optimism about the eurozone was a surprise to me. My conclusion is to tilt the weight of the equity portion of a portfolio towards the US and Asia xJapan.

Negative interest rates are here to stay — so get used to them – BI
Negative Is the New Zero – WSJ
Demography is destiny, maybe – The Economist

Daily Central BanksWSJ
Hilsenrath’s Take: Goodbye Patient; Hello Reasonably Confident * Yellen Puts Fed on Path to Lift Rates * ECB Says Greek Reform Proposal a Good Starting Point * The Bank of England Dove Hunt Is On * Abe Aims to Tip Balance on BOJ Board

Daily MacroWSJ
Suddenly the global economy’s prospects look a bit more hopeful. Greece’s bailout extension means that the eurozone crisis is off the agenda for a couple of months at least, while the start of the ECB’s bond purchase program should improve already hopeful signs across the single-currency’s economy. The Fed and BoE have said they’re in no particular rush to tighten rates. And now China’s preliminary manufacturing purchasing managers’ index, released overnight, suggests that the economy’s sharp slowdown of recent months might have been halted.

Danske DailyDanske Bank

Greek reform proposals pass the first test US rates take a dive on Fed dovishness EUR/USD ready to break out?

Dollar Heavy, Bonds and Emerging Markets RallyMarc to Market

Daily ShotTF
US house price appreciation continues to trend significantly above wage growth - which has been around 2%, indicating that homes are becoming increasingly unaffordable for a large portion of the population. With rents also rising faster than wages and new construction remaining subdued, lack of affordable housing may become a serious issue for the US in years to come.

Stocks In Holding Pattern Following Blow-Off Top, Oblivious Of Fed's Warning Of "Stretched" Valuations

FX UpdateTF
The Yellen testimony disappointed USD bulls, but can the USD weaken much further without the next round of incoming data to enlighten us? Elsewhere, the commodity dollars have jumped the most on Yellen’s perceived dovishness.

From the FloorTF
Janet Yellen's dovish stance took the markets somewhat by surprise yesterday. The Fixed Income Desk's Simon Fasdal offers some explanation as to why she may have decided to go down this path.

Daily NewsletterTF
The general conclusion seems to be that US Fed chair Janet Yellen has shifted any likelihood of a summer hike towards the autumn at the earliest while maintaining the freedom of movement to act earlier if US data proves to be very strong in the next few months.

Martin Sandbu’s Free LunchFT
Fed chair's meta-guidance distracts from more important things

Yellen täsmensi askelmerkkejä koronnostolle | Ruotsin keskuspankki julkistaa kokouspöytäkirjan | Kreikan uudistusehdotukset läpäisivät ensimmäisen testin

Etla: Vientimme Venäjälle putosi kelkasta jo vuonna 2009Verkkouutiset

Sivistysvaliokunta vastustaa kansalaisaloitetta – PS vaatii pakkoruotsin poistamistaSuomen Uutiset

Pakkoruotsin kumotut perustelutSampo Terho