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Tuesday, April 23

23rd Apr - US Close: FlashBang!




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EUROPE
Should Germany Exit the Euro?Project Syndicate
Hans-Werner Sinn: Those who advocate the creation of Eurobonds do not not recognize the real nature of the monetary union's problems. The ongoing financial crisis is merely a symptom of the eurozone’s underlying malady: its southern members’ loss of competitiveness.

Good news or bad news?Buttonwood / The Economist
A weak economy, low rates, low bond yields, never-ending deficits; it all looks remarkably Japanese.

A Heartbreaking Work of Staggering FollyKrugman / NYT
Why are we doing so badly? And I mean really badly; in Europe, recovery is now behind where it was at the same point of the Great Depression… The immediate answer is, bad policy — above all, fiscal austerity in the face of mass unemployment, which is exactly what everything we know about macroeconomics says you shouldn’t be doing.

ECB
Today’s PMIs will not prompt a rate cutNordea
We believe the ECB sees additional interest rate cuts beyond the current level as more or less ineffective. That is the reason, in our view, that interest rates were not cut already in December. However, key figures have surprised to the downside and we believe the ECB will have to act if the bank believes the economic outlook has weakened further or if it is unable to come up with an SME “support package” even though the ECB believes the effect will be limited.

Want to know what the ECB is going to do? Watch the German PMI MacroScope / Reuters
The one thing the ECB’s Governing Council never allows to pass is any sign that Germany, Europe’s No.1 economy, is floundering.

  PIIGS
Spanish Bond Spreads Back Below 300bps - At 17 Month LowsZH

Club Med yields, in historical contextalphaville / FT
Snapshot of Spanish, Portuguese and Italian 10 year paper, over 150 years.

Spain's Rajoy Yields To Merkel, Agrees That EU Countries Must Cede SovereigntyZH

Greece Internal Devaluation UpdateWSJ
So, how has the deflationary process been playing out in Greece? Not too well.

UNITED STATES
361 Capital Weekly Research BriefingThe Reformed Broker

  “FLASH CRASH”
The Complete Evaporation Of All Market Liquidity In One Chart ZH

And This Is What A Full Blown Market Exodus Looks LikeZH
260,000 S&P 500 e-mini contracts traded in the three minutes following the fake AP Tweet. That is ~$20.4 Billion notional value

Finally, This Is What A "Locked Market" Looks LikeZH

I Survived the Flash Crash of ’13The Reformed Broker

‘Hack Crash’: Fake Tweet Shows Pitfalls of Algo-Driven WorldWSJ

  MACRO NUMBERS
Markit Flash Manufacturing Index Falls to Six-Month Low – WSJ
New Home Sales As Expected While Home Price Plunges To Nine Month Low – ZH
New Home Sales at 417,000 SAAR in March – Calculated Risk
A few comments on New Home Sales – Calculated Risk

ASIA
Mr. Can-do Kuroda and his mystical bag of BoJ tricksTradingFloor
In driving yields to practically negative levels, Kuroda has forced local lifers, pension funds, insurers etc to go hunting elsewhere.

OTHER
The slowdown is right on schedule - for the 4th year in a rowSober Look
The "spring slowdown" is here again.

Chief Economist’s Corner: Bubbles give you a hangoverNordea (pdf)
Risk appetite among investors has risen sharply on expectations that the extremely accommodative monetary policies pursued globally will be in place for a long time yet, and because the risk of a systemic meltdown in the financial sector or a euro collapse has been dramatically reduced.

Newsletter Issue 3The Short Side of the Long

FINNISH
Harmaa eminenssiYLE Areena
Silminnäkijäkertomus eurooppalaisen unelman, euron, tuhosta. Arvostettu EU- ja talousasiantuntija Johnny Åkerholm vie EU:n kulissien taakse, missä poliitikot tappoivat haaveen taloudellisesta vakaudesta (55 min).

Åkerholm rehellisenäToimi Kankaanniemi / US Puheenvuoro

"Suomen teollisuus kärsinyt eurosta"TE
Ilmarinen hajauttaa salkkua euroalueen ulkopuolelle

Opiskelija, joka nolasi talouseliitinYLE
Tiukan talouskurin puolesta puhuvat poliitikot ja talousasiantuntijat saivat nenilleen, kun yliopisto-opiskelija osoitti, että heidän taajaan siteeraamansa tutkimus oli täynnä virheitä.

Eduskunnan toverituomioistuinJyrki Virolainen
Kaikkonen saa jatkaa vankilatuomiosta huolimatta suuren valiokunnan varapuheenjohtajana