Europe's crisis is in a stealth mode for the time being, while US is on the forefront (uncertainties over FED's policy, fiscal cliff, debt ceiling, earnings).
I believe that this will reverse in the coming weeks (or months): someone from the Fed states clearly what they want, US debt ceiling will be solved for now, earnings will be what they will be. Meanwhile in Europe the Italian elections, failure of previous austerity, Greek trouble, Spanish trouble and failure of new austerity measures (Finland), the explosion of debt- and loss mutualization through ESM, TARGET2 and EFSF will come to the front.
Latest next summer the heroin of eurosummits will be back driving the picture, followed by the aftermath and endgame after the German elections.
Previously on MoreLiver’s:
EUROPE
Guaranteeing jobs for the unemployed, an uncertain
future for Václav Klaus, and should academics make blogging their New Year’s
resolution?
Trends for 2013 – presseurop
After 2012, the year in which the euro was supposed to
collapse, it is tempting to predict what 2013 has in store for Europe’s
citizens, even if it means running the risk of being wrong. Here is a quick
review of some of the main trends that will have a long-term impact on
political and daily life in the European Union.
Happy 2013? – voxeu.org
Charles Wyplosz: Financial market quiescence has
removed pressure for immediate policy action on the Eurozone crisis. This
column argues that while important repairs were made in 2012, the most
difficult ones still lie ahead. Much remains to be done by unwilling
politicians. Things will have to get worse before they get better. The best
hope is that this happens in 2013 rather than in 2014.
Daniel Gros: The claim that Europe needs
more integration to save its social model has long lost its credibility.
Integration is irrelevant to that question, and, in those areas where deeper integration
really would benefit Europe, it appears to be
the last thing that national leaders want.
As they celebrate the 40th anniversary of entry into
the European Union, Danes are weighing up the pros and cons. To persuade fellow
Danes that the Union can still benefit Denmark, all the country's political
forces should come together and propose daring new ideas, writes Berlingske.
Between now and 2020, an entire generation of European
civil servants will retire. Thousands of posts, the equivalent of one third of
the current EU workforce, will have to be filled in European institutions. The
Commission alone will have to replace 10,000 of its 35,000 employees.
Britain's
services sector shrank for the first time in two years in December, increasing
the likelihood that the country is "triple-dipping" back into a
recession.
Why the Irish deserve a helping hand to leave their
bail-out programme
Europe’s energy policy
delivers the worst of all possible worlds
1) Military-industrial 2) Wall Street-Washington 3) Big
Oil-transport-military 4) healthcare industry
Will the United
States follow the European
path in 2013? Let’s hope so.
It’s not a skill
mismatch: Disaggregate evidence on the US unemployment-vacancy relationship –
voxeu.org
US unemployment seems stuck at an unusually
high level of 8%, prompting some to suggest a widespread skills mismatch. This
column argues that a skills mismatch is not supported by the evidence. Rather,
out of the possible explanations, it seems that any shift in the ratio between
unemployment and vacancies is driven by either lower search efforts by the
long-term unemployed or by a reduction in their employability.
The economy is about to hit a pothole as the household
sector absorbs a large front-loaded drag resulting from the fiscal cliff
agreement. The increase in payroll taxes and higher marginal rates on
high-income households is set to depress 1H13 income growth by roughly 2%-pts
at an annualized pace.
US Services Add Jobs
On Fiscal Cliff Worries – ZH
ISM Non-Manufacturing
Index increases in December – Calculated
Risk
FISCAL CLIFF / DEBT CEILING
(audio) World
Weekly with Gideon Rachman – The
World / FT
The fiscal cliff agreement: lasting solution or just a
brief respite? Politicians in Washington have
managed to avoid plunging the United
States off the “fiscal
cliff”, which would have imposed deep spending cuts and tax rises. Instead,
President Obama and Congress agreed limited tax rises, while deferring
discussion of spending cuts. But is this a solution, or just a respite? Richard
Macgregor, Washington bureau
chief, and Martin Sandbu, economics leader writer, join Gideon Rachman.
The troubling similarities between the fiscal mismanagement
in Washington and the
mess in the euro zone
The fiscal cliff:
Nothing to be proud of – The
Economist
Barack Obama wrings an 11th-hour deal on taxes from
John Boehner and the Republicans, but accomplishes little else
Default Ceiling:
Bluffing into the Nuts – Calculated
Risk
I prefer "default ceiling" because
"debt ceiling" sounds like some sort of virtuous limit, when, in
reality, the vote is about whether or not to the pay the bills - and voting for
default is reckless and irresponsible.
Debt ceiling dealing
drama – alphaville
/ FT
Not everyone agrees and paper does offer a few
justifications for it, but we still think that the continued existence of the
ceiling is a national embarrassment. But it’s there, and because it wasn’t
dealt with as part of the fiscal cliff negotiations, we’re about to witness
another round of insufferable and train-wreck-potential negotiations.
FED
Bullard and the
"Fiscalization" of Monetary Policy – Economist’s
View
The title implies a threat to central bank
independence, but he gives little reason to believe such a threat exists.
Plosser, Bullard Say
Fed’s Asset Purchases Contingent on Jobs – BB
Two Federal Reserve regional bank presidents said a
decline in unemployment may prompt a halt to $85 billion in monthly bond
purchases, speaking a day after the Fed indicated it may end the buying as
early as this year.
Revenge of the Fed
hawks – sort of – MacroScope
/ Reuters
Fed officials suggest
possible end to asset purchases in 2013 – Reuters
The Federal Reserve could halt its asset purchases
this year, two top Fed officials suggested on Friday, a view also gaining
traction among economists at Wall Street's top financial institutions.
Wall Street economists see Fed's Treasury buying ending in 2013 – Reuters
Most economists at Wall Street's top financial
institutions expect the Federal Reserve in 2013 to end the program with which
it bought Treasury debt in an effort to stimulate the economy, according to a
Reuters poll on Friday.
Fed getting closer to
its objective – Nordea
(pdf)
In the past six months employment growth has averaged
148k per month (as measured by the household survey of the jobs report), while
labour force growth has averaged 58k. Assuming this pace will continue going
forward, unemployment will hit 6.5% “already” in October 2014, down from 7.8%
in December 2012.
A Thicket of
Conflicting QE Dreams and Confusing Data – MarketBeat
/ WSJ
Revenge of the Fed hawks – sort of – MacroScope / Reuters
Bullard: Fed’s
Specific Guidance Likely to End When Rates Rise – WSJ
Bullard says Fed
could pause QE this year – Reuters
The Federal Reserve will be in a position to think
about halting its large-scale asset purchases this year if the U.S. economy
improves, a top central bank official said on Friday, fingering a 7.1-percent
unemployment rate as a possible goal.
Fed’s Lacker Warns of
Potential Inflation – WSJ
Fed’s Yellen: Tougher
Rules Needed to Strengthen System – WSJ
Yellen: Fed Likely to
Vary Interest Rates for Reserves in Future – WSJ
Fed’s Plosser Says
Monetary Policy Thresholds Positive Step – WSJ
Fed’s Historic Error
Is in Not Acting Boldly Enough, Paper Argues – WSJ
ASIA
10 ASEAN Trends to
Watch for in 2013 – The
Diplomat