Previously on MoreLiver’s:
EUROPE
Berlusconi
criticised, nuclear power feels the cold, and is the eurocrisis over?
Europe’s leaders need to put private
investment at the center of their growth strategy by devising policies that
open the gates to large potential flows. The European Council meeting on
February 7 is an ideal opportunity to make a start.
Dutch PM: Eurozone needs exit clause – euobserver
Dutch PM says a country should be able to exit
euro – Reuters
A country
should be allowed to leave the euro zone if it so wishes without having to quit
the European Union as well, Dutch Prime Minister Mark Rutte was quoted by a
German newspaper on Friday as saying.
Following
her party's failure in a major state election, Chancellor Angela Merkel is
distancing herself from her junior coalition partner, the business-friendly
Free Democrats. It is a risky move, and could indicate that she is aiming at a
partnership with the opposition Social Democrats.
CRISIS
OVER OR NOT?
Morgan Stanley On Europe: "We're Getting Worried" – ZH
…systemic
risk in Europe is now at recent lows...and just as in 1H12 and 1H 11, core
yields are rising notably, peripheral spreads compressing, money-market curves
are steepening, and 2s5s10s cheapening.
Stress Indicators - not as good as you would
expect – TradingFloor
I expected
that the Stress Indicators would show new lows in yield, risk aversion etc, but
I am surprised by the charts
Is the Euro Crisis Over? – Project
Syndicate
As long as
sustained economic improvement has not materialized, political risk will remain
prevalent…limited consensus in Europe on what, exactly, is needed to make the
monetary union resilient and prosperous again… Almost no decision results from
serene deliberation, with most taken under financial-market pressure in an
attempt to avoid the worst.
BANKS
Dutch nationalise SNS Reaal bank group in $14
billion rescue – Reuters
The Netherlands has nationalised bank and insurance
group SNS Reaal in a $14 billion (8.89 billion pounds) rescue that highlights
the fragility of European banks and the continued exposure of taxpayers five
years after the financial crisis erupted.
The Putrid Smell Suddenly Emanating From
European Banks – Testosterone
Pit
Italian Bank Scandal Spreads To Other Banks:
Berlusconi Big Winner – ZH
ECB
Euro zone inflation nears ECB goal, record
joblessness – Reuters
Euro zone
inflation fell to a two-year low in January as companies cut prices at a time
of record joblessness, potentially giving the ECB more scope to lower interest
rates later this year.
LTRO Post-Mortem: Who Repaid What, As European
Excess Cash Is Now Reabsorbed – ZH
UK
2013 Non-Prediction No. 13 – Macro
Man
The UK will NOT adopt either a Nominal GDP level or growth target.
Target, too – The
Economist
Mark Carney,
named late last year as Mervyn King's successor as governor of the Bank of
England, wasted no time in setting high expectations (so to speak). In a
December speech Mr Carney reckoned that a central bank facing a demand
shortfall while stuck at the zero lower bound might do well to adopt a new
target: a level of nominal GDP.
A senior EU
official has cautioned Britain against seeking an "a la
carte" membership of the European Union, warning that London should not dismantle what has
already been signed up to.
SPAIN
Adios Austerity, But Debt Will Still Limit Spain’s Growth Measures – BB
Prime
Minister Mariano Rajoy oversaw 62 billion euros of tax hikes and spending cuts,
851,000 job losses and three different deficit targets, all in his first year
in office. Now European Union budget enforcer Olli Rehn is ready to ease up on
the beleaguered premier.
Spain's Rajoy denies wrongdoing in kickbacks scandal – Reuters
Spain's Rajoy denies wrongdoing in kickbacks scandal – Reuters
Spanish
Prime Minister Mariano Rajoy on Saturday denied wrongdoing in a growing
corruption scandal that threatens his credibility just as he makes headway
against economic crisis.
Meanwhile In Spain... – ZH
Meanwhile In Spain... – ZH
Spain's IBEX stock market index has
plunged by around 6% this week - the biggest weekly drop in six months.
UNITED STATES
Are jobless recoveries the Fed's fault? – noahpinion
Is recent job growth enough to ice the Fed’s
QE3 plans? – MacroScope
/ Reuters
Lighthouse Macro Report – January 2013 – Lighthouse
IM / scribd
It would
not take much to tilt a lot of indicators into recessionary territory. Heightened
vigilance is warranted, especially in regards to possible belt-tightening from
the fiscal side.
ASIA
Japan is faced with an unprecedented
population challenge that will have social, economic, and political
consequences for years to come.
Yu Yongding:
China's economic revival since the third quarter of
2012 should come as no surprise: as long as the government has room to wield
expansionary monetary and/or fiscal policy, faster growth is always only a
matter of time. But China's rapidly rising money supply and
weakening fiscal position now threaten to change that for good.
George
Magnus: In 2013, China is at an important crossroads in
its economic development. This column argues that we cannot continue to
extrapolate from China’s recent economic record. If growth
is to remain high and stable, choosing the right course will require nothing
less than a significant change in China’s economic model, brought about by what
might be the most important political reforms since the 1980s. Whether or not
its growth performance tips it into the middle-income trap depends on engaging
with and implementing widespread reforms that may be incompatible with the
primacy of the Communist Party.
Banks vs babies – alphaville
/ FT
Here’s a
table from a fresh IMF paper pondering the country’s Lewis Turning Point, the
moment when people streaming into cities from farms will be fully absorbed,
industrial wages will take off, and — an estimated 350m jobs later after it
began — the era of cheap Chinese labour will end.
Economists
in and out of China have warned that the low-wage
worker is bound to play out as China eventually runs out of surplus
labor. But when? Two International Monetary Fund economists have the answer.