27th Jun - US Close: Banking union decaf, Cyprus, Fed misunderstood XIV

Previously on MoreLiver’s:

Thursday US Open: Confident but not lending Europe.

Thursday EU Open: Busy Calendar

Wednesday US Close: GDP revised down, Finnish

Weekender: Weekly Support

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Roundups & Commentary

News – Between The Hedges

Markets – Between The Hedges

Recap – Global Macro Trading

The Closer – alphaville / FT

US: Bonds Bid; Stocks Stall At 50DMA; Gold/Silver Shellacked (Again) – ZH

EUROPE

UK Growth has been even worse than we thought – mainly macro

Training For a Non-Existent Job – WSJ

European leaders gathered in Brussels are crafting an array of plans to tackle youth unemployment, one of the harshest symptoms of the economic crisis, but history suggests many of their proposals will have mixed results.

  BANKING UNION

Q&A: haircuts, shaky lenders and banking union – Brussels Blog / FT

A European Camel is a Horse Made in Committee – Marc to Market

Geek’s Guide to EU Bank Failures – WSJ

Seven handy questions and answers on planned EU rules for dealing with bank failures.

Bail-Ins: EU Deal Protects Taxpayers in Bank Bailouts – Spiegel

Under an agreement reached early Thursday, European banks, their investors and depositors will be required to cover at least 8 percent of potential losses before governments step in with aid. It is a major step forward for the planned European banking union.

Press release ECOFIN Council meeting 26-27 June 2013 – Consilium (pdf)

Banking Union: New rules to save failed banks – Presseurop

EU’s Failed Banks Pact: A Cheat Sheet – WSJ

EU bail-in rules give taxpayer partial protection – Breakingviews / Reuters

European taxpayers are gradually being insulated from the risks taken on by their banks. An agreement reached in the early hours of June 27 by European Union finance ministers means that future bailouts will be financed to a greater extent by bank shareholders and creditors, rather than via public money. That represents significant progress.

  PIIGS

Cyprus: Statement by the European Commission and the IMF – IMF

The eurozone’s second sovereign restructuring, confirmed – alphaville / FT

We saw this coming. While it’s not a full write-down, nor is it simply a rollover of debt. Extending maturities without raising the coupon sounds like a haircut to net present value…

Interim Report June 2013 – ICFCBS (pdf)

Independent Commission on the Future of the Cyprus Banking Sector

Deposit flight and deleveraging of the Cypriot banking system – Bruegel

Overview of Spain’s economy in 2012 - reflection and outlook – BIS (pdf)

Testimony by Mr Luis M Linde, Governor of the Bank of Spain, before the Parliamentary Committee on Economic Affairs and Competitiveness, Madrid, 20 June 2013.

UNITED STATES

(interactive) The State of U.S. Business, in Charts – WSJ

How's the public debt looking? Not bad! – Wonkblog / WP

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/27/hows-the-public-debt-looking-not-bad/?wprss=rss_ezra-klein

  FED

Fed’s Dudley: Markets Wrong to Think Tighter Policy Coming Soon – WSJ

Dudley Speaks: "Taper May Be Appropriate Later In 2013" – ZH

Fed’s Powell: Market Adjustments Larger Than Justified by What Fed Has Said – WSJ

Fed’s Lockhart: FOMC Meeting Wasn’t Major Shift in Direction – WSJ

1 Week Alongside the Fed's Open Mouth Operation – ZH

Dudley, Powell: hey markets, relax – alphaville / FT

Several FOMC members have had their say since last week’s meeting

The other risk – Buttonwood / The Economist

The core PCE number is only 1% - a modern low - and the Dallas Fed, which uses a trimmed mean number (eliminating the outliers), actually recorded a small fall in the latest numbers

Low Inflation Highlights Fed Dilemma – WSJ

Inflation is running well below the Fed’s 2% target. Thursday’s reading on the Fed’s favorite inflation gauge showed prices up just 1.1% in May from a year earlier, matching the lowest pace on record.

Bernanke Was Clear, Fed’s Crystal Ball Is Cloudy – View / BB

Grow up, people. It’s time to stop blaming Bernanke for your losses. Either you weren’t listening or you heard only what you wanted to hear.

Why Markets Aren’t Getting the Fed’s Message – View / BB

Bernanke can’t seem to get the market to understand the central bank’s plans. The problem might be less his communication skills than what he’s trying to communicate.

  MACRO NUMBERS

Personal Savings Rate Rises To 2013 High As Consumers Defer Spending Spree – ZH

Personal Income increase 0.5% in May, Spending increased 0.3% – Calculated Risk

Consumer spending rebounds, jobless claims fall – Reuters

Consumer Spending in U.S. Rebounds as Incomes Increase – BB

Core PCE Remains at Historic Low – dshort

Real Disposable Income Per Capita: Up Only 0.43% Year-over-Year – dshort

ASIA

Australia: A Fading Star? – BCA

Here’s the Real Crisis in Australia – View / BB

Australia is about to pay the price for growing so addicted to a developing nation. Exporting natural resources led to the neglect and atrophying of other critical sectors. It’s created a two-speed economy: The commodities-rich western states and Queensland raced ahead on China’s once insatiable demand for metals, while the rest of the country lagged behind.

Michael Pettis on the China Liquidity Crunch; China Bulls Beware – Mish’s

OTHER

Emerging Markets: What has Changed – Marc to Market

EMEA Weekly – Danske Bank (pdf)

Stress Indicators: Close to margin call? – TradingFloor

Steen Jakobsen: The Stress Indicators reflect the margin call on banks from global central banks and the US Dollar's positive bias is again rising. We conclude that the business cycle is hitting a new low with a subsequent slight recovery over the next 30-40 days.

Breaking Bad Habits – Project Syndicate

Stephen S. Roach: At last, central banks in the US and China seem to be headed toward monetary-policy normalization. While the move will be painful for liquidity-addicted investors, nothing less can ensure that current excesses in asset and credit markets do not spawn new and dangerous distortions in the global economy.

Making the financial system more resilient – BIS (pdf)

Dr Jens Weidmann, President of the Deutsche Bundesbank, at the 2013 FESE (Federation of European Securities Exchanges) Convention, Berlin, 27 June 2013.

Intervention in a panel on "The future of Europe" – BIS (pdf)

Mr Jörg Asmussen, Member of the Executive Board of the European Central Bank, at the IIF (Institute of International Finance) 2013 Spring Membership Meeting, Paris, 26 June 2013.

FINNISH

Vastaanharaamisen valtakunta – Hannu Visti

Eroon eurosta ja EU-jäsenehdot uusiksi – Olli Immonen / US Puheenvuoro

Vapaakauppaliitosta tulonsiirtounioniksi? – Susanna Koski / US Puheenvuoro

Pankki: Asuntojen hinnat luultavasti laskevat Suomessa – TalSa

Euroopan keskuspankin pitkään jatkunut liian löysä rahapolitiikka on ajamassa pohjoiset euromaat vaikeuksiin, saksalaispankki Commerzbank arvioi. Ongelmat pyörivät periferiasta keskukseen.

Raportti: Kyproksen pankit luhistuivat piittaamattomuuden kulttuuriin – HS

Kyproksen pankkien romahtamisen taustalla on liian löyhä, piittaamaton ja sulkeutunut hallintokulttuuri, joka johti viranomaisten laajaan epäonnistumiseen valvonnassa.