A lot of stuff, sorry
about late coverage. First, the IMF board’s confidential memo on Cyprus has been leaked – interesting, might be
slightly scandalous, but nothing the eurocrats couldn’t handle. In Finland, the damage from the court order to release
the secret documents on the Greek
collateral deal are causing minor headaches. While this will surely make
further “integration” (read: participating in bailing out other countries’
banking systems), it will not stop participation, as the parliament has tied
its hands with the ESM – majority rulings force Finland to participate, like it or not. Next step will
be the release of the gruesome Spanish collateral agreements.
In Europe, terrible GDP numbers have pointed out that
the economy is contracting, monetary policy is too tight, and austerity is not
working. While this is hardly news, for the eurocrats it is. They have hard
time arguing with real data, so what has been obvious to everyone for a long
time, is about to be admitted soon. Voices from the editorial teams of
Bloomberg and The Economist suggest the euro is a failure. Again, no news
there. The Bank of England released its inflation report, and it is widely
expected that BoE will turn into a US-style QE-program soon.
Elsewhere, the budget
forecasts by the US Congressional Budget Office still cause some talk, and the
Abenomics is still going strong: Nikkei keeps rising and bond yields have
broken through an important resistance level.
It is as complicated as it sounds and was designed to make Finland's demand so expensive that no other euro zone country would ask for the same. To that extent, it has worked…. EU's economy commissioner Olli Rehn on Monday joked that Klaus Regling, the head of EFSF, should be given the Nobel prize for economics or Nobel peace prize for preparing the complicated deal. 4-Oct-2012 Reuters
Previously on MoreLiver’s:
Weekender: Weekly Support
Roundups &
Commentary
News – Between
The Hedges
Markets – Between The Hedges
Daily Interest Rate Monitor – Global
Macro Monitor
Recap – Global Macro Trading
The Closer – alphaville / FT
US: Final Hour Ramp Closes Stocks At All Time Highs – ZH
EUROPE
Save Europe:
Split the Euro – View
/ Bloomberg
France should champion a new strategy under the banner not of nationalism but
of European solidarity. A splitting of the euro system would be in the best
interests of both France and Europe because it would speed the EU’s return to
economic growth -- the only sure guarantee of European stability and unity.
What the euro has meant – Free
exchange / The Economist
Most of the euro area
would have been better off being Britain or America over this time, even in per capita terms, and Britain and America have hardly had outstanding performances. The
remarkable thing to me is that no euro-area economy is rushing for the exit,
despite the fact that real output per person has fallen 15% in Greece and is lower in Italy and Portugal than it was 13 years ago. Perhaps the
periphery imagines that they would have done worse without the euro.
The People Of The EU Support Euro For The Very
Reason It Is Destroying Them –
Forbes
Money, whether its
form is gold, sea shells, dollars, or Euros has potentially devastating effects
precisely because folks are reluctant to give it up.
Growth is absolutely
key to debt sustainability, yet markets in Europe don't seem to care
Broken transmission mechanisms – Free
exchange / The Economist
The need for a targeted lending scheme in the
euro area – Free
exchange / The Economist
New figures from Europe reveal that both GDP and inflation in the euro
area are falling, while unemployment is steadily rising. The mix of pain calls
for monetary easing (We are inviting experts in the field to comment on the
piece and related research.)
Some of Eurozone's troubles can be traced to
its paralyzed banking system –
Sober
Look
And just like in Japan in the 90s, not addressing the bad loan
problem quickly generates prolonged periods of contraction.
Support for the
European integration project is dropping: Growth matters * A disillusioned France should matter to markets * Will a single chart
damage Europe’s efforts to resolve the crisis? *
The Tories publish their EU Referendum Bill – Open
Europe
"Do you think
that the United Kingdom should remain a member of the European Union?”
There is no sovereign debt crisis in Europe – MacroScope
/ Reuters
It is merely a sequel
to the U.S. financial meltdown that started, like its American counterpart, with
dangerously-indebted risk-taking on the part of a super-sized banking sector.
The EU’s AIFMD and Your Road Show – All
About Alpha
Shane Brett, of Global
Perspectives, makes the point that the "non-European world" is in no
position to ignore the implementation of AIFMD. Although the implementation
will be gradual, by 2018 any manager from anywhere who wants to bring his road
show to a European city will have to be fully compliant.
CYPRUS
It looks like
Stockwatch in Cyprus has obtained a copy of the (IMF executive board) members’ comments on
the Cypriot bailout — a rather high-level internal document to find its way to
the public… and it makes for fascinating reading.
Documents seen by
Reuters show that as Cyprus headed towards financial meltdown in March,
most notable among companies transferring money from the country's two main
banks were Russians and East Europeans.
S&P says Cypriot deposit grab may set euro
zone precedent – Reuters
The grab on bank
deposits that accompanied Cyprus's bailout could be repeated elsewhere in the
euro zone, and the bloc's banking union may not be strong enough when it is
introduced, Standard and Poor's said on Wednesday.
When the Cyprus bank
run began earlier this year, Russians set much of the pace. Documents seen by
Reuters show that as the Mediterranean island headed towards financial meltdown
in March, most notable among companies transferring money from the country's
two main banks were Russians and East Europeans.
BOE
INFLATION REPORT
Bank of England’s inflation report in five bites – Money
Supply / FT
Mervyn King’s economic
ray of light may be too bright – MacroScope
/ Reuters
BoE makes rulers
redundant – Money
Supply / FT
Mark Carney will
follow the Fed, not the Bank of Japan – Gavyn
Davies / FT
GDP
DATA
Eurozone recession
continues into sixth quarter – BBC
Germany can't stop euro zone's longest recession – Reuters
France Slips Into Recession, Adding Pressure on Hollande – BB
Euro-Area Recession
Deepens as Slowdown Exceeds Estimates – Businessweek
German GDP in Q1:
Weaker than expected, not only due to cold weather – Nordea
France Double-Dips As European Recession Is Now Longest On Record – ZH
Five quick takeaways
from the eurozone GDP numbers – Money
Supply / FT
Euro area: Less
recession but still recession – Nordea
Euro Will Pay the Price
for Euro-Zone Recession – WSJ
Europe's endless recession, in one chart – Wonkblog
/ WP
UNITED STATES
A Professional Preps for the End of QE – Forbes
CBO Forecasts: Then And Now – ZH
Have we solved our fiscal problems? – Felix
Salmon / Reuters
Manufacturing – Some
Red Flags – PragCap
Fed: Industrial
Production decreased 0.5% in April – Calculated
Risk
Industrial Output In
April Slumps The Most In Eight Months – The
Capital Spectator
Industrial Production,
Capacity Utilization Both Miss: Good Weather Blamed – ZH
ASIA
Great Graphic: What Japanese Investors Bought – Marc
to Market
JGB yields spike in spite of all the BOJ bond
buying – Sober
Look
Putting the “Collapse” in Japanese Government
Bonds in Perspective – PragCap
OTHER
Merrill Lynch: Market Analysis
Technical Handbook – The
Big Picture
FX Forecast Update - May: Peak in EUR/USD
behind us – Danske
Bank (pdf)
Yield Forecast Update
- Back from the lows – Danske
Bank (pdf)
Global Economic Recovery is Losing Momentum,
Especially in Euro Area – Moody’s
Not in the spirit of
Hayek
– Reuters
Reading Hayek can be uncomfortable for those who are under the
impression he would agree with them - including many conservatives today.
All up in Bloomberg’s
broker-dealer business – alphaville
/ FT
Here are 315 charts
on poverty and inequality. Satisfied yet? – Wonkblog
/ WP
The OECD is out with its latest disposable income, poverty and
inequality numbers for all its member states. The full data are here, but it’s
more fun to play around with the awesome interactive they created for the
occasion
FINNISH
KHO 2013:90: Kreikan vakuussopimus julkinen – Jyrki
Virolainen
Keisarilla
ei ollut vaatteita – Henri
Myllyniemi / US Puheenvuoro
Tiilikainen Kreikka-sotkusta: Vakuus ei ole
aito – IS
Brittineuvojen tarkka sisältö on hämärän
peitossa – TS
Mistä Suomi oikein sopi? Valtiosihteeriltä
selitys oudolle Kreikka-sotkulle – IS
VM:n Kreikka-salaus perustui ulkomaisten
lakitoimistojen arvioon – IS
Brax ihmettelee Urpilaisen puheita – ”Pakko
sanoa, että sitä on hyvin vaikea uskoa” – AL
Kreikka-vakuuksien aitoudesta sukeutui
sanasota – AL
Sdp:n Kumpula-Natri: Vakuuskeskustelu
sivuraiteilla – TS
Oppositio grillasi Urpilaista – "Miksi
moinen vaiva?" – Verkkouutiset
"Hallituksen toiminta on naurettavaa, se
joskus pistää nauramaan" – Verkkouutiset
Kreikka-sotku pöyristyttää - tässä selitys – IL
Asiantuntijat: Kreikka-salailusta ei Suomelle
hyötyä – TalSa
Keskustan Tiilikainen ärähti: "Suomi
menetti maineensa" – IL
Laatulehti tyrmää: Onko Suomen
Kreikka-vakuuksista mitään hyötyä? – US
Valtiosihteeriltä selitys ihmetyttäneelle
Kreikka-sopimukselle – MTV3