Another Ecofin meeting behind us, worse than expected macro from US, Slovenia and Portugal in trouble, Japan's monetary policy intrigues, banking is a big issue behind the headlines. Focus shifting to Germany as everyone wonders what comes after their elections. Note that the recent
decision on Cyprus are covered in the Special.
Previously on MoreLiver’s:
Current Specials
EUROPE
Germany expects praise, Thatcher’s legacy for Europe, and will Juan Carlos abdicate?
EU Takes Step Toward Treaty Change – WSJ
The EU bowed to German
demands for a debate on a change to the bloc's treaty, possibly offering U.K. Prime Minister David Cameron an opening for
his own treaty-change ambitions.
The Bundesbank’s disingenuous claim that
Southern Europeans are richer than Germans has stoked anti-bailout sentiment – Europp
/ LSE
The studies have been
framed in such a way to move public discourse to be against bail outs for
countries in Southern
Europe.
EU losing 1 trillion euros a year to tax
dodging – Reuters
Tax dodging causes the
European Union to lose around 1 trillion euros of income each year, the president
of the European Council said on Friday as he announced that EU leaders would
discuss the issue at a summit next month.
The EU's three
financial watchdogs see little chance of contagion from financially troubled Cyprus after completing their joint review of risks
facing European financial markets.
Euro area industrial production rises but GDP
decline still seen – TradingFloor
BANKING
Schaeuble Favors ‘Liability Hierachy’ for
European Bank Bailouts – BB
German Finance
Minister Wolfgang Schaeuble said he wants to see a “liability hierarchy” where
owners and creditors of banks are first in line to bail them out before
governments bolster equity and the European Stability Mechanism provides
international aid.
EU banking union 'could need treaty change' – The
Telegraph
Germany's finance minister has claimed that a banking union could require
changes to EU law, potentially putting the brakes on a plan designed to prop up
the euro.
Balance-sheet repairs in European banks – voxeu.org
The IMF has recently
argued that much has been achieved to address the recent financial crisis in Europe. This column looks at what progress has been
made with bank restructuring, arguing that vulnerabilities remain. Intensified
efforts are needed across a wide range of issues, one of the most important
being bank balance-sheet repair.
Austria’s Last Stand Against EU Assault On Bank
Secrecy – Testosterone
Pit
Bankers count on watered down EU trading tax – Reuters
Bankers are confident
they can persuade the European Union that its proposed financial trading tax
poses enough risks to struggling economies and banks to warrant being watered
down.
ECB
Benoît Coeuré: SME financing, market innovation
and regulation – BIS (pdf)
The ECB as a Lender of Last Resort to
Governments – mainly
macro
Policy makers
throughout Europe have two economic blindspots: the fallacy of
austerity at the Zero Lower Bound, and the necessity of a LOLR.
GERMANY
This weekend, the
anti-euro Alternative for Germany party will celebrate its official launch in Berlin. Interest in the group has been growing in
recent weeks, but pollsters say its chances of landing seats in the federal
parliament this fall are still slim.
Double Standards: Europeans Are Right to Be
Angry with Merkel – Spiegel
Chancellor Angela
Merkel has tenaciously insisted that austerity is the only way out of the
crisis for ailing EU countries. She doesn't practice what she preaches in Germany, though, which makes growing anger toward her
understandable.
Germany's push for austerity during the ongoing euro crisis has prompted Nazi
depictions of Chancellor Angela Merkel in many parts of Southern Europe. SPIEGEL speaks with Cambridge University historian Brendan Simms about the "German question" and
persistent hatred toward the country.
Why Germany
(Mistakenly) Thinks it Can Kill Its Export Markets Through Austerity and Still
Prosper II – naked
capitalism
Southern Europeans are
attacking Germany’s policies, but mostly for the wrong reasons
SLOVENIA
Could Slovenia become the next euro-crisis victim? A new OECD
report highlights the deep problems facing the Slovenian banking industry and
economy. While both Brussels and Ljubljana insist that a bailout won't be necessary,
difficult times are in store for the country.
PORTUGAL
Portugal's leading elder statesman has called on the
country to copy Argentina and default on its debt to avert economic
collapse, a move that would lead to near certain ejection from the euro.
Charlemagne: Euro wobbles – The
Economist
Portugal’s constitutional court creates new problems
for the euro
The Fed may have to
push the unemployment rate beyond the point that it starts generating inflation
if it wants to heal underlying labor-market weakness, a paper written by two
economists working at the IMF argues.
Eight WTF Divergences – ZH
Key Earnings Reports Next Week – Bespoke
The recent bet on US retail could be premature – Sober
Look
With the current
improvements in the labor and housing markets, investors have piled into
retail-focused companies.
Fear The Uncorrelated Stock Market – ZH
Corporate CDS tightens to multi-year lows;
bonds lag – Sober
Look
MACRO
NUMBERS
US
Economic Data Plunges Most In 10 Months To 4-Month Lows – ZH
March Retail
Sales
Point to flagging
economic momentum – Reuters
Decline by Most in
Nine Months – BB
Decline 0.4% in March
– Calculated
Risk
Not so Good – PragCap
Slide, Miss
Expectations, Post Biggest Drop Since June – ZH
Down 0.4 percent in
March, weaker than expected – Handelsbanken
Underwhelm, but GDP
should be solid – TradingFloor
Tumble The Most In 9
Months – The
Capital Spectator
Analysis: Another
March Clunker – WSJ
April Consumer
Confidence
Hits nine-month low – Reuters
Declines to a
Nine-Month Low – BB
Declines to 72.3 – Calculated
Risk
To Nine Month Low,
Biggest Miss To Consensus On Record – ZH
At Lowest Level Since
July 2012 – WSJ
Speech by Mr Haruhiko
Kuroda, Governor of the Bank of Japan, at a meeting held by the Yomiuri
International Economic Society, Tokyo, 12 April 2013.
Japan's
Full Frontal: Charting Abenomics So Far – ZH
Inflation in Japan:
mission (partially) accomplished
– alphaville
/ FT
After the central
bank’s radical moves, now is the time for the prime minister to show his mettle
Inflation targeting
did not prevent financial instability before the Crisis nor did it provide
sufficient stimulus after the Crisis. In a new Vox eBook, 14 world-renowned
scholars, practitioners and market participants analyse inflation targeting and
its future. They argue that inflation targeting should be refined not replaced.
Indeed, it is needed now more than ever to keep expectations anchored while the
advanced economies work their way through today’s slow growth, rickety banks,
and over-indebted public sectors.
BANKING
Report to G20 on Basel III
implementation – BIS
Three months after
revealing that banks were using wildly different models to measure risk in
their trading books, the Basel Committee on Banking Supervision has signaled
that it looking for similar issues in the banking book.
Financial Globalization in Reverse? – Project
Syndicate
For three decades,
financial globalization had seemed inevitable, until the 2008 crisis exposed
the dangers, with the globalized financial system’s intricate web of
connections becoming a conduit for contagion. Cross-border capital flows
abruptly collapsed, and, almost five years later, they remain 60% below their
pre-crisis peak.
MARKETS
Valuations Across All Stock Markets since 1979 – Mebane
Farmer
Peak oil isn’t dead: An interview with Chris
Nelder – Wonkblog
/ WP
You can’t always
predict things perfectly. But likewise, it’s just not correct to say that
because we’ve unlocked tight oil and we’re drilling in shale that everything is
great, that we’re off to the races, that we can keep growing the global economy
on this stuff.
G-10 FX Mega-charts update – TradingFloor
The Scariest 50 Hours – Bruce Krasting
There was a four year
stretch where I was responsible for big currency spec positions. I was
regularly over a billion dollars long short in either USDJPY or USDDM (this was
before the Euro).
Diworseification – View
from the Blue Ridge
Investors benefit from
moderate diversification yet are made decidedly worse off when
over-diversification dilutes strong security selection.
FINNISH
Angela
Merkel on parempi versio Thatcherista – TalSa
Britannian ensimmäistä naispääministeriä
Margaret Thatcheria voisi poliitikkona verrata Saksan liittokansleriin Angela
Merkeliin. Erona on vain se, että Merkel on hoitanut rautarouvan roolinsa
monessa mielessä paremmin.
Raportti
– Pankkisääntelyn vaikutukset – Nordea
(pdf)
Rahoitusmarkkinoiden sääntelyä kiristetään
finanssikriisin seurauksena. Sääntely kiristyy lukuisilla hankkeilla, joiden
lopullista muotoa ei ole päätetty tai yhteisvaikutuksia vielä tiedetä. Tässä raportissa
kuvataan tiivistetysti sääntelyn keskeisimpiä tällä hetkellä arvioitavissa
olevia vaikutuksia yrityksiin, kotitalouksiin, sijoittajiin ja
kansantalouksiin.
Tässä
syy euromaiden varallisuuseroihin – Jan
Hurri / TalSa
EKP:n tutkimus osoittaa, että kotitaloudet
ovat kriisimaissa keskimäärin varakkaampia kuin Suomessa ja muissa kriisitoimia
kustantavissa euromaissa. Vähävaraiset suomalaiset näyttävät toisin sanoen
maksavan varakkaampiensa velkoja. Selitys löytyy eurotalouden pimeistä
varjoista.
Carl
Haglund: Saksan vaalitulos voi jättää Suomen yksin – Talouselämä
Saksan syyskuiset vaalit voivat järkyttää
Suomen Eurooppa-politiikkaa. Saksan nykyisen opposition sosiaalidemokraateissa
ja vihreissä on enemmän yhteisvastuun kannattajia.