General europessimism in articles. The solution seems obvious to most (full fiscal and banking union combined with much easier monetary policy), but most are doubtful if there can ever be political will - and mandate from the electorate - to do that. Calendar page updated.
Previously on MoreLiver’s
Roundups and
Commentary
News – Between
The Hedges
Markets – Between
The Hedges
Recap – Global Macro Trading
The Closer – alphaville / FT
Roundup – A
View From My Screens
Roundup – Kiron Sarkar
/ The Big Picture
Tomorrow’s Tape: Auto Sales Likely Flattened in
September – WSJ
European Summary – ZH
European Equities Roundtrip Friday Losses But
Credit Is Not Buying It
US Summary – ZH
Stocks Hold Green Close As VIX/Credit/Rates
Signal Risk-Off
Reference
Debt
crisis: live – The
Telegraph
The Euro
Crisis Blog – WSJ
FX Options
Analytics – Saxo
Bank
European
10yr Yields and Spreads – MTS indices
EUROPE
Euro Counterfactuals
(Wonkish) – Krugman
/ NYT
if secular shifts in
trade patterns are responsible, in a proximate sense, for part of Spain’s move
into trade deficit and Germany’s move into surplus since 1999, what this says
is that even if you get relative wages back to 1999 levels, Spain will still be
in deficit and Germany in surplus – so you need to go beyond that point.
Getting worse more slowly isn't good enough – Free exchange
/ The Economist
The crisis in the euro area is beginning to
feel like a permanent piece of the world's economic landscape: a great red spot
that just churns and churns and never goes away. It isn't, though. One day the
crisis will be over, either because the euro zone managed to muddle through or
because it didn't, and came apart.
Growth without rebalancing is not enough – Free exchange
/ The Economist
The status quo is only bearable because most
people suffer from the illusion that the current course will end the crises and
depressions. It has not so far and almost certainly will not in the future. The
cross-border claims have to be liquidated one way or another, whether by
subsuming them into a pan-European identity, restructuring, or rebalancing. Yet
there seems to be no political support for any of these options, which suggests
that the breakup of the single currency is the most likely course.
The inflation treatment – Free exchange
/ The Economist
The IMF presents six case studies which help to
illustrate how consolidations generally work (or don't)…while inflation might
be unpalatable in many ways, the alternatives look more costly and dramatically
less likely to succeed. And so the supposition ought to be that inflation will
at some point become the treatment of choice.
Benoît Cœuré:
Collateral scarcity – a gone or a going concern? – ECB
Cœuré on collateral
scarcity – alphaville
/ FT
potential ECB response to signs that some of the scarcity will also be “of a permanent nature”.
potential ECB response to signs that some of the scarcity will also be “of a permanent nature”.
we remain profoundly
skeptical of claims that the country has turned a corner. Shortly after
announcing what the EU's Ollie Rehn suggested was an austere budget that went
above EU recommendations, Spain revised its 2012 budget deficit.
Sovereign risk-weighting, face-off du jour – alphaville
/ FT
Basel catches European bank capital legislation letting big cross-border lenders play a bit too fast and loose with zero risk-weighting of government bonds for its taste.
Basel catches European bank capital legislation letting big cross-border lenders play a bit too fast and loose with zero risk-weighting of government bonds for its taste.
EUROPE: FRANCE
In the face of
on-going recession and deepening unemployment in France, François Hollande’s commitment to deficit
reduction may soon put him at odds with voters – europpblog
/ LSE
Weekly Stress Indicators focus on France – Saxo
Bank
I have focused on France this week as the
Socialist Government went beserk in austerity and tightening. This could put France at serious risk for
growth and I think maybe President Hollande may need to reread the economic
page on fiscal multipliers.
Preemptive fiscal folly – alphaville
/ FT
We’re trying to be open-minded and could well
be wrong, but once again it’s hard to avoid the conclusion that the fiscal
policy debate now shouldn’t be about whether the government should borrow more
in the short term to support the economy, but about how best to do so. Yet that
isn’t what’s happening, not even close.
Why the Fed shouldn’t raise rates to discipline
Congress – MacroScope
/ Reuters
The US ISM
saves the day – Nordea
ISM Manufacturing
index increases in September to 51.5 – Calculated
Risk
Manufacturing
ISM Rebounds Slightly – Mish’s
ISM
Manufacturing Back Above 50 – Bespoke
US ISM Manufacturing – BNY
Mellon
ISM
Manufacturing Report’s Good, But It’s Not That Good – MarketBeat
/ WSJ
OTHER
Weekly Market
Comment: Leap of Faith – Hussman Funds
It would be a relief
to see the data shift away from a recessionary pattern in a durable way, and I
would be happier still for stock market valuations and market conditions to support
a significant exposure to market risk. Both of those will arrive, but they are
not here at present, and I expect there will be some downside first.
MarketBeat’s Fond
Farewell to the Third Quarter – MarketBeat
/ WSJ
interactive review of the quarter
Cofer catch-up time – alphaville
/ FT
The glacial pace of FX reserve change continues, as documented by the IMF ’s “Composition of Official Foreign Exchange Reserves” data which was released on Friday.
The glacial pace of FX reserve change continues, as documented by the IMF ’s “Composition of Official Foreign Exchange Reserves” data which was released on Friday.
If it
ain’t broke, don’t fix it. If it is broken, Fixit. – MoreLiver