Best of the ending
week, previous ‘Best’ here.
Previously on MoreLiver’s:
Current Specials
EUROPE
Who’s the eurozone’s poorest,
really? – alphaville / FT
EUROGROUP
/ ECOFIN
Leaked eurogroup paper:
trouble ahead for Portugal? – Brussels blog / FT
Although Cyprus has
pushed its way back into the news, the main event at Friday’s meeting of
eurozone finance ministers in Dublin is expected to be a decision on whether to
give Ireland and Portugal more time to pay off their EU bailout loans.
EU ministers to tackle Cyprus
fallout, banking union at Dublin
talks – Reuters
Fallout from the messy
bailout of Cyprus will top the agenda of a two-day EU finance ministers meeting
in Dublin beginning on Friday, with focus also on growing German reluctance
over euro zone banking reform.
EU mulls bank law to impose
losses on depositors – Reuters
European Union ministers
will consider a proposal this week to impose losses on interbank deposits of
lenders in dire financial trouble as they shape a draft EU law introducing
powers that would also penalize those with big savings.
ECB
The ECB’s non-standard
monetary policy measures: the role of institutional factors and financial
structure – ECB (pdf)
Working paper no. 1528
by Philippine Cour-Thimann and Bernhard Winkler
Barclays’ forecast
puts the breach of the ‘psychological level’ of €200bn, below which Eonia may
start to be sensitive to changes in liquidity conditions, in Q3/Q4 if the pace
of weekly repayments remains at around €6bn (the average weekly payback,
excluding the two big repayments on the first day of the exit option window for
each operation).
George Soros: Contrary
to popular opinion in Germany and elsewhere, the euro crisis – for which
Germany is disproportionately responsible, owing to its dominant position – is
far from over. Despite the complex political and economic origins of Europe’s current malaise, the solution can be summed
up in one word: Eurobonds.
Kohl confesses to euro's
undemocratic beginnings – euobserver
Former German
Chancellor Helmut Kohl admitted he would never have won a referendum on the adoption
of the euro in his country and said he acted "like a dictator" to see
the common currency introduced.
Eurointelligence Founder
Wolfgang Münchau, Once a Staunch Euro Supporter, Now Welcomes the Anti-Euro
Party "Alternative for Germany" – Mish’s
It's not a question of if,
but only when Merkel grasps the nettle of eurozone debt mutualisation – The Telegraph
Eurozone Math; One Size Fits Germany; Door Number Two – Mish’s
PORTUGAL
Spain, and
the threat from Portugal and Cyprus – The World / FT
Gideon Rachman: The
refusal of the Portuguese courts to authorise the full version of the latest
round of austerity cuts will be watched closely in neighbouring Spain – which is, of course, a bigger and more
systemically important economy. The Spanish fear that, economically and politically,
Portugal offers a vision of their future.
The Commission on Portugal: Is This for Real? – fsaraceno
To summarize, the
Commission is happy that the Portuguese government chose to ignore a ruling of
its constitutional court (“welcomes that…”); it threatens to cut funding if the
Portuguese government does not follow its prescriptions (“it is a precondition
for a decision…”); it is in a state of denial on confidence (“the growing
investor confidence…”); it recommends that democratic discussion does not take
place (“it is essential that key political institutions are united in their
support…”) This goes beyond my wildest thoughts.
Portugal must stick to targets agreed with
international lenders if it wants more time to repay bailout loans, the
European Commission said in a statement on Sunday.
Portugal must stick to targets agreed with
international lenders if it wants more time to repay bailout loans, the European
Commission said in a statement on Sunday.
PIIGS
Of political power and
dual-currencies in Cyprus – alphaville / FT
Some post-Cyprus thoughts
from Citi’s Buiter et al… first on rolling capital controls and the chances of
a new Cypriot pound being forced into existence (full paper)
Cyprus: Oddities in leaked bailout documents – Brussels blog / FT
Report on macroeconomic
imbalances – EC (pdf)
Malta is safe, at least :D
Euro or Drachma, or Both? A
Temporary Parallel Currency Concept – EconoMonitor
Only our suggestion of
a parallel currency combines the advantages inherent in the internal
devaluation and exit policies: it provides instant devaluation while staying
within the euro community with a defined schedule for full reintroduction of
the euro as the sole legal tender
In Business Daily,
with Cyprus sorted for now, who's next on the
euro-sick-list? Spain and Slovenia are currently in the doctor's waiting room -
both with chronic banking problems. Will this ever end? We ask the European
Commissioner, Ollie Rehn. And we meet the man who says he's got all the numbers
you need to know to understand China.
The European
Commission warned of “excessive” risks to the economic health of Slovenia and Spain, calling on both governments to take urgent
action to stem the spread of the euro crisis.
Correspondent David P.
provides a list based on a simple but powerful precept: follow the smart money…
Slovenia, Portugal, Malta, and then Spain. Though Spain and Italy are considered core E.U. nations, we should
probably differentiate between political and financial cores and peripheries. Should
a self-reinforcing crisis of liquidity, solvency and loss of trust gather
momentum, Italy's debt situation could reach critical mass, regardless of its political
status as a core nation. Similar political and financial crises could arise in
The Netherlands and France, too, though these crises will probably not be
triggered by an exit of core-EU mobile capital.
I had expected that
the data flow would argue for the Fed to postpone tapering off QE purchases
until late this year. The Fed seems to
have a different view, thinking that the data flow argues for ending QE by the
end of this year. My expectation is that
the Fed is being overly optimistic and will find that summer is too early to
being tapering off QE. That seems to be
the message from the bond market as well; yields aren't exactly soaring.
Minutes Signal End to QE – Tim Duy’s Fed Watch
The Fed seems content with
the current pace of activity. Content
enough to believe they can pull the plug on quantitative easing this year. I remain concerned that ending QE will slow
forward momentum, thus the Fed is running the risk that they the economy will
not achieve sufficient velocity to escape the zero bound. The actual timing is
still data dependent, but I am wondering if we should change our framework from
"how good does the data need to be end QE" to "how bad does the
data need to be to continue QE?"
ASIA
Front-Running Markets Get Carried Away By Bank of Japan – WSJ
“For every Japanese
investor seeking yield, there is a foreign one searching for returns from
Japanese equities”
Mr Soros Trumps Mrs Watanabe – ZH
The bulk of JPY
selling pressure has come during non-Tokyo trading hours,
OTHER
Interview with George Soros – SCMP
Complete transcript of
an interview with George Soros in Hong Kong on April 4,
2013.
Bail-In vs. Bailout – David Kotok / The BigPicture
(Fun) Post BoJ New World Quiz – Macro Man
IN FINNISH
Tämähän
on jo kuin teuraskarjan rauhoittelua – Jan
Hurri / TalSa
Europäättäjät hokevat, että Kyproksen pankkien
saneeraus on poikkeus eikä kriisitoimien uusi malli. Hokemat ovat kuin
teuraskarjan rauhoittelua. Kyproksen saneeraus sujuu prikulleen niin kuin
valmisteilla olevan EU-direktiivin mukaan pitääkin. Rauhoittelu vihjaa, että
päättäjät pelkäävät toden teolla uutta pankkipaniikkia.
Pysyvätkö keskuspankkien raharuiskut hallinnassa? – Jan
Hurri / TalSa
Japanin keskuspankki lisää raharuiskujensa
tehoa päästäkseen maata vaivanneesta deflaatiosta ja saadakseen inflaatiota
tilalle. Onnistuuko rahakoe ja pysyykö se hallinnassa, selviää aikanaan. Nyt
tiedossa on vain, että liikkeelle lähtee rutosti uunituoretta rahaa – ja se,
että aiemmin tällaisia raharuiskuja on ollut perin vaikea sammuttaa.
Puuttuva
pätkä putkea – Hannu
Visti
Esitän tässä suomalaisen julkisen sektorin
ongelman, mutta asia on yleistettävissä valtaosaan muistakin länsimaista.
Esityksen taiteellinen taso ei päätä huimaa, mutta emme anna sen häiritä.
Säkillä
valoa Kreikan pimeyteen – Janne
Saarikko / Navi Group