Picks from
my posts since the previous 'Best
of'.
Previously on MoreLiver’s:
EUROPE
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.
As the Eurozone tries to turn the corner, one
member nation continues to lag – Sober
Look
The trends
in the composite PMI measures for France vs. the rest of the Eurozone have
diverged.
'Europe's A
Fragile Bubble', Citi's Buiter Warns Of Unrealistic Complacency – ZH
The Good, The Bad, And The
Ugly Six Charts Of Europe – ZH
ECB
ECB
Preview: Good cop, bad cop – TradingFloor
ECB will
continue stating that everything is improving (bad cop) but promises to monitor
the situation and to act if things get worse (good cop)
ECB afterthoughts:
verbal intervention – TradingFloor
Draghi was honest about the state of the economy and
in doing so expectations of a rate cut later reemerged. By verbal intervention
alone, he was able to move the EURUSD by 200 pips - though QE comments by the
Fed's Evans also helped a lot.
PIIGS
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.
Morning Briefing (EU/US): Cyprus Q&A – BNY
Mellon
With
the debate over the bailout for Cyprus now coming into focus,
it’s time to start looking at the details and to come to some tentative
conclusions as to how this may play out.
Euro Tremors Risk Market Respite on
Spain-Italy, Banks
– BB
Europe’s political tremors risk spoiling
the region’s market calm, with corruption allegations buffeting Spanish Premier
Mariano Rajoy and Italy’s Silvio Berlusconi narrowing the
front-runner’s lead as elections loom.
UNITED STATES
The Fed, Credit Bubbles and Exit – CFR
The Fed, Credit Bubbles and Exit – CFR
Jeremy Stein’s speech
today–“Overheating in Credit Markets:
Origins, Measurement, and Policy Responses”–provides valuable insight on
the issue of credit bubbles that could result as a consequence of current
Federal Reserve policy. As such, it
speaks to the upcoming debate over the Fed’s exit strategy.
"In Feb 2013, Fed Will
Buy 75% Of New 30y Treasury Supply" – ZH
straight
from this quarter's Treasury Borrowing Advisory Committee (i.e., Primary
Dealers) presentation to the Treasury Department
Where The Consensus Is...
Wrong – ZH
Via Gluskin
Sheff's David Rosenberg
ECONOMICS
How should central banks
think about the financial system? – Free
exchange / The Economist
Monetary policy
alters the incentives for financial firms to take risk, for both good and ill.
The good news is that, in theory, central bankers have the tools to restrain
both bubbles and panics. The bad news is that the price stability and financial
stability mandates are often “orthogonal” in the short term, according to Mr
Brunnermeier. Actions taken to prevent disinflation can encourage excessive
risk-taking, while anti-inflationary measures can inadvertently exacerbate or
induce panics.
Economic nationalism will
only fuel failure –
The
A-list / FT
Stephen
King: Currency wars may be all the rage but they are merely a symptom of a much
more deep-rooted problem. We are witnessing the return of economic nationalism.
At the 2009 London Group of 20 summit, it seemed for a fleeting moment that
nations had learnt how to work together to solve the world’s economic and
financial problems. That dream no longer holds. Persistent economic stagnation
has left our political leaders increasingly looking for national solutions to
what have become deeply-entrenched international problems.
The End Of An Era – Tullet Prebon / ZH
The economy
as we know it is facing a lethal confluence of four critical factors – the
fall-out from the biggest debt bubble in history; a disastrous experiment with
globalisation; the massaging of data to the point where economic trends are
obscured; and, most important of all, the approach of an energy-returns
cliff-edge.
MARKETS
Falling tail-risk = New
secular bull? – Humble
Student
The best
explanation I have is that the current bull is a cyclical upswing and not a
secular one. This analysis suggests that we are still in a range-bound market.
Stocks could go higher from these levels, but don't expect them to rocket to
sustainable new highs in the next 12-36 months.
Full data set – Reinhart and Rogoff
Blogs we like – Lighthouse
IM
Suggested Reading List – UMASS
Finance Society (pdf)
Apparently
from Goldman Sachs around 2007.
The Complete And Unabridged
Works Of Dylan Grice
– ZH
244-page
compendium covering the bulk of Grice's work over the past 4 years. Covering
the financial gamut: from Valuation, to the Euro Crisis, to Japan, to Asia, to Gold and commodities, all the
way to the Philosophically arcane, we are confident that the attached
presentation will provide countless hours of reading pleasure for all.
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
Stress
Indicators – TradingFloor
Stress Light - Is tail-risk coming back?
OFF-TOPIC
The
Vulnerability Of The Elites – World
Economic Forum / ZH
Geopolitical Risk in 2013: Categorizing the major
themes, risks, opportunities, and wild cards—based on discus-sions of the
Global Agenda Council on Geopolitical Risk in Dubai, November
2012
Man in the machine – Babbage /
The Economist
For the
past nine years Scott Maxwell has worked on Mars. Or at least as close to it as
is possible on Earth. This, it turns out, is Pasadena, California, home to
NASA's Jet Propulsion Laboratory (JPL), which manages many probes, rovers and
satellites for America's space agency.
FINNISH
Ruotsi on hyötynyt omasta valuutasta – analyysi vain
pitää tehdä kunnolla – tyhmyri
Eurooppalainen Suomi – Heli
Hämäläinen / US Puheenvuoro
Vai vakautta ja kasvua – katin kontit – Jan
Hurri / TalousSanomat
Euromaat ovat sopineet, että kunkin jäsenmaan ja koko
euroalueen talous on vakaa ja kasvaa. Kriisi on osoittanut, että moiset
sopimukset ovat pelkkää paperia ja vaikuttavat jopa tarkoitustaan vastaan.
Kaikista maailman talousalueista juuri euroalueen talous on jo vuosien ajan
ollut epävakain ja heikoin.
Kasvaako tulevan
Euroliittovaltion hinta päivä päivältä? – tyhmyri
Suomen talouden madonlukuja
sijoitusammattilaisen analyysissä – euro tulee ja euro tappaa – tyhmyri
Miksi eurokriisi palaa ja todennäköisesti
entistä suuremmalla voimalla?
– tyhmyri
Epäolennaisuuksien Eurooppa – Henri
Myllyniemi / Piksu
Suomen julkisen
sektorin ongelma on talouden tipahtaminen eikä niinkään yllättävä pöhöttyminen
– tyhmyri
Pinnan alla kytee kolme
poliittista pommia – Jan
Hurri / TalSa
Eurotalouden tyyntyneen
pinnan alla kytee ainakin kolme poliittista pommia. Hyvässä lykyssä ne jäävät
suutareiksi, mutta niissä on riittävästi ruutia myös kriisin uuteen
kärjistymiseen. Tyven repeää uudeksi myrskyksi, jos nämä pommit räjähtävät yhtä
aikaa. Ne kytevät Espanjassa, Italiassa ja Kyproksella.