Articles on Europe are getting nastier. September deadlines and showdown is approaching. Will we see another muddle-through attempt in this Mexican stand-off?
Previously on MoreLiver's:
Wed: US Open
Roundups
News – Between
The Hedges
Markets – Between
The Hedges
The Closer
– alphaville
/ FT
Recap – Global
Macro Trading
Market
Commentary – A View From My Screens
Overview – Kiron
Sarkar / The Big Picture
Tyler’s US Summary – ZH
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EUROPE
Early Retirement for the Eurozone? – Project
Syndicate
Nouriel
Roubini: Germany and the ECB are now relying on the hope that large-scale liquidity will
buy time to allow the adjustments needed to restore growth and debt
sustainability in the eurozone periphery. But, if a eurozone breakup can only
be postponed, delaying the inevitable would merely make the endgame worse –
much worse.
The toxic commitment to the eurozone that seems
to have possessed most of Europe is having a disastrous effect on not only the economies of Europe, but also on the notion of moral
responsibility. Were Germany to exit the Euro there would be some hope for Europe’s economy, but perhaps more
important, a German exit would stop other countries assuming bailouts are as
good as guaranteed.
When will the euro collapse? It’s already dead – MarketWatch
In reality, whether it is a few months or a
decade away does not make as much difference as you might suppose. Why not?
Because in most of the ways that actually matter, the euro is already dead.
Unlocked handcuffs – Fistful of Euros
If there’s a rough trend in the data, it’s for
small and mostly non-Eurozone countries to issue under English law, perhaps in
search of the credibility or good signal of such a framework. But for the rest of them, its sovereign debt
and we’re not even supposed to discuss default and they’ve pinky-promised that
they’ll pay it back. But legally, they could rewrite the terms in the morning.
Searching for common ground on a European
banking union – alphaville
/ FT
With the EC set to outline its proposals for a
European banking union in less than a month’s time, leaked documents
detailing the initial discussions indicate differences of opinion remain as
wide as ever.
Finland Lags Behind Nordic Neighbors – WSJ
Finland is an economic power among countries that use the euro, but compared with its Scandinavian neighbors it is slipping. The dichotomy is putting stress on citizens and politicians here.
Finland is an economic power among countries that use the euro, but compared with its Scandinavian neighbors it is slipping. The dichotomy is putting stress on citizens and politicians here.
Yield curve
below three years negative, reserves show safe haven moves continuing
Spot The Looming Crisis – ZH
Debt situation
in EU similar to US, but in Europe banks have lot more deposits, and there is
less shadow banking, making the banks vulnerable to runs.
USA
US
Industrial Production – BNY
Mellon
Another
July Upside Surprise: Industrial Production – The
Capital Spectator
US
industrial production +0.6% in July, capacity utilisation up to 79.3%f– ASA
US consumer price index was flat for July – ASA
Key Measures show slowing inflation in July – Calculated Risk
US consumer price index was flat for July – ASA
Key Measures show slowing inflation in July – Calculated Risk
Chart:
Inflation? Where? [Update] – ASA
About that “Housing Recovery” – PragCap
I don’t know what the technical definition of a
“recovery” is in economics, but this is not a “recovery”. It might be a “stabilization”, but let’s not
go all crazy abusing the english language here.
I was a housing bear for years and years and I am infinitely more
optimistic about the state of US housing here.
But let’s be honest here. This is
no “housing recovery”.
Data Dump – Tim Duy’s
Fed Watch
A macrolook:
I want to argue that the failure of the
economy to accelerate and below-target inflation, combined with more negative
than positive warning signals, argue for additional Fed easing in
September. That, however, has been the
case for months, and during that period Bernanke has not moved the Fed to that
easing…On net, I think the outcome of the September FOMC meeting remains a
toss-up.
No grain, no pain – alphaville
/ FT
A couple of charts from Barclays economists
showing the relative contribution of food to headline and core CPI
More good news. Now what? – alphaville
/ FT
We’re less sure that this means QE is unlikely.
The possibility remains that Europe will again flare up once vacation is over, and the risks from the
fiscal cliff are unchanged. With inflation seemingly having rolled over in
recent months with the decline in commodity prices, the argument can be easily
made that the Fed is currently undershooting its inflation target while (as is
all too plain) continuing to also dramatically miss on the unemployment side of
its mandate.
OTHER
Killing The 'Stocks Are Cheap' Myth Once And
For All – ZH
Plenty of
good valuation charts from BoaML.
Morgan
Stanley: over the long run theoretical
total returns can exceed GDP so long as investors don’t actually try to capture those returns. But
if ever investors try to achieve such GDP-plus total returns, it will be
impossible for returns to stay above GDP growth.
FX Forecast Update Aug (34 slides) – Danske
Bank (pdf)
Emerging Markets Briefer Aug (19 pages) – Danske
Bank (pdf)