Picks from the ending week's posts.
Previously on MoreLiver’s:
EUROPE
Interpreting Target2 Balances; German Banks are
Pulling Out of Europe – HistorySquared
The latest way European banks could (still)
mess everything up
– Quarz
Morgan
Stanley’s Global Head of FX Strategy, Hans Redeker, foresees a problem. If some
banks leave the LTRO earlier than others, the ones that stay behind might feel
pressured to pay up before they’re really ready
Beginner’s guide to Italy’s general election 2013 – The
World / FT
In the euro area, it’s pretty
much going to suck for awhile – alphaville
/ FT
research
from Goldman Sachs
ECB
Special Report: How Mario Draghi is reshaping Europe's central bank – Reuters
The banker
now in charge of rescuing the euro wants his top staff to take Sundays off.
Mario Draghi, president of the ECB, eschews long meetings and refrains from
lecturing his colleagues, senior ECB officials say.
Price level targeting – next
ECB easing step – Nordea (pdf)
A temporary
price level target path would signal that the ECB will keep interest rates at
the current very low level for longer and specifically beyond the point where
medium-term inflation is projected to return to 2% and until prices return to
the level path consistent with 2% inflation on average.
ECB Meeting comments – MoreLiver’s
Daily
CYPRUS
Why Cyprus is Important – Marc to
Market
Amounts not
determined, presidential elections in Feb, Troika in disagreement, political
issues, euro exit risk.
Merkel Confronts Growing
Skepticism on Bailout Aid to Cyprus – BB
Merkel warns Cyprus not to expect special treatment – euobserver
German
Chancellor Angela Merkel has warned Cyprus it should not expect special
treatment when negotiating the terms of its bailout, which she suggested would
not be concluded anytime soon.
UNITED STATES
Via Goldman Sachs: Q&A On
The Debt Limit – ZH
Don’t play with the debt
ceiling – Nordea
(pdf)
As the
deadline for raising the US federal debt ceiling nears without
a resolution, markets are likely to get increasingly nervous (or read the summary)
ASIA
Abenomics: Japan's Thermidor – Marc
to Market
Recap:
Japan – Global
Macro Trading
Moving targets and a lack of
self-belief at the BoJ – alphaville
/ FT
BoJ plans
to raise inflation target from 1 to 2% at Ja 21-22 meeting
What sub-6% Chinese growth
will do to various assets – alphaville
/ FT
OTHER
Currency Bores - What
Policymakers Really Mean When They Talk About FX – ZH
Steven
Englander of Citi: It is hard to find a policymaker who hasn’t actively tried
to talk his currency down.
No free lunch for central
bankers – Humble
Student
In
conclusion, central bankers can't completely eliminate volatility and their
policies come with costs. In the case of Europe, the ECB has traded Eurogeddon for a
recession. In general, market volatility has risen and become far more
sensitive to headline news.
What’s Inside America’s Banks? – The
Atlantic
Some four years after the 2008 financial crisis,
public trust in banks is as low as ever. Sophisticated investors describe big
banks as “black boxes” that may still be concealing enormous risks—the sort
that could again take down the economy. A close investigation of a supposedly
conservative bank’s financial records uncovers the reason for these fears—and
points the way toward urgent reforms.
Regulators ease key bank rule
to spur credit – Reuters
Global
regulators gave banks four more years and greater flexibility on Sunday to
build up cash buffers so they can use some of their reserves to help struggling
economies grow.
Banks, Here’s your new
liquidity regime. Now stop blaming us. Love, Basel – alphaville
/ FT
The complete set of changes is on the BIS website, but here are some
highlights.
Almost All of Wall
Street Got 2012 Market Calls Wrong – BB
OFF-TOPIC
Why
You Won’t Be the Person You Expect to Be – NYT
When we remember our past selves, they seem quite
different. We know how much our personalities and tastes have changed over the
years. But when we look ahead, somehow we expect ourselves to stay the same
A Pickpocket’s Tale – The
New Yorker
The
spectacular thefts of Apollo Robbins.
Global Risks 2013 8th ed. – World Economic Forum
Three risk
cases: 1) Testing Economic and Environmental Resilience 2) Digital Wildfires in
a Hyperconnected World 3) The Dangers of Hubris on Human Health
IN FINNISH
Yleinen palkka-ale olisi mieletön vikatikki – Jan
Hurri / TalSa
Talouspäättäjät ovat kriisin kuluessa toteuttaneet useita
vikatikkejä ennenaikaisista vyönkiristyksistä alkaen. Yksi iso virhe on vielä
kokeilematta: yleinen palkka-ale. Se olisi velkaiselle taloudelle myrkkyä – ja
kärjistäisi omatekoisen taantuman kotikutoiseksi lamaksi. Lordi Keynes varoitti
yli 75 vuotta sitten: tämä olisi mieletön vikatikki.
Mittarit todistavat: Ei perusteita palkka-alelle,
mutta ei korotuksillekaan – YLE
Kilpailukykymittareiden perusteella teollisuuden toivomalle
palkka-alelle ei riitä perusteita, mutta ei niitä riitä koville
palkankorotuksillekaan. Teollisuustuotanto kannattaa yhä Suomessa, mutta ei
enää yhtä hyvin kuin takavuosina. Kannattavuutta ovat nakertaneet Nokian kutistuminen
ja finanssikriisi joka vei tilaukset, mutta jätti palkankorotukset.
Navigaattori – USA:ssa talouspoliittisia
linjavalintoja yhä auki – Nordea
(pdf)
Parin kuukauden sisällä vaaditaan myös päätöstä velkakaton
nostosta, jotta liittovaltiolla riittäisi varoja menojen rahoittamiseen.
Todennäköisesti tämäkin kiista päätyy kompromissiin, jonka seurauksena menoja
maltillisesti leikataan. Jyrkkä finanssipolitiikan kiristäminen ei siten uhkaa
USA:n kasvua ja julkinen alijäämä pienene vain verkkaisesti. Linjavalintoja on
myös edessä keskuspankissa, jossa keskustellaan siitä kuinka pitkään rahahanoja
voidaan pitää nykyiseen tapaan löysinä.
Tällä menolla euro pehmenee reunoilta
– Jan
Hurri / TalSa
Euron pitäisi olla joka euromaassa samaa rahaa, ja
muodollisesti näin onkin asian laita. Silti uutta rahaa syntyy ja lähtee
liikkeeseen eri euromaissa erilaisin perustein. Tavallista pehmeämmin perustein
syntyvät eurot ovat olleet kriisimaiden ilmiö, mutta nyt myös Ranska näyttää
lipsuneen. Pääjohtaja Liikasen tarkastuskomitea tutkii asiaa.