Previously on
MoreLiver’s:
EUROPE
Letta survives, Austrian elections and should Ireland’s Seanad be
abolished?
Goodbye to all that
centrism – Reuters
John Lloyd: The euro zone crisis is already forcing integration, yet
citizens are recoiling from the EU. That’s the central contradiction of Europe, stark and grim.
It's nearly impossible to be a centrist politician in Europe these days.
Enrico Letta: If Europe is to reverse the growing divisions among
eurozone countries, it must extend the principle of shared responsibility to
all major EU economic-policy initiatives. But doing so requires a broader view
of supranational coordination, with all the implications for political
legitimacy and accountability that would follow.
Opinion: How about a social troika? – euobserver
Picture the scene:
Troika members go to a member state and are greeted with enthusiasm.
Why Barroso’s
pessimism about achieving EU decentralisation is sort of irrelevant – Open
Europe
The war on EU red
tape: Will this time be any different? – Open
Europe
German politics:
Afraid of Angela – The
Economist
Merkel, SPD welcome further talks on German
government – Reuters
Angela Merkel's
conservatives and the opposition Social Democrats (SPD) agreed to meet again in
10 days to explore forming a "grand coalition" government after an
initial three-hour meeting on Friday was called constructive by both sides.
The asset-quality
review: Gentlemen, start your audits – The
Economist
Close scrutiny of Europe’s banks may turn up
unexpected shortfalls.
European macro data is not only now worse than the US but has fallen to 7
week lows.
Computing the bill for European taxpayers, come
the next crisis – alphaville
/ FT
PIIGS
Citigroup’s FX
strategist Steven Englander: The range in bond yields in the U.S. has risen to 0.065 percentage points from 0.03
percentage points to 0.04 percentage points back in May. Meanwhile, Italian and
Spanish government bonds, which were more prone to gyrations over the course of
the financial crisis are now more sedate in comparison.
Hold on, the periphery looks relatively calm? – alphaville
/ FT
Capital Flight inside the Euro Area: Cooling
Off a Fire Sale – The
Big Picture
Stability Fund Chief Expects Third Greek
Bailout – Spiegel
Greece might need a third aid package as soon as next year, Klaus Regling told
a German paper Friday. But the head of the ESM permanent bailout fund is much
more optimistic about the situation in Portugal and elsewhere in the euro zone.
Spanish banks: Health
check
– The
Economist
His move is unlikely
to cause a short-term fall in Italian bond yields. But longer term, Rome’s headhunting of the IMF’s top budget expert,
Carlo Cottarelli, could yield major sovereign-debt dividends.
UNITED STATES
This creates material
headwinds for economic growth. Unfortunately there is no evidence that the
current monetary policy will reverse the trend of weakening loan growth.
FEDERAL RESERVE
A Time of Testing – Minneapolis
Fed
Narayana Kocherlakota,
President Federal Reserve Bank of Minneapolis, October 4
Note to Fed: Get Out
in Front of the Potential Debt Crisis – Macro
and Market Musings
The Fed's QE programs have been able to able to offset much of the
fiscal drag over the past three years. A NGDP level target would step up the
Fed's game and make it better able to deal with the fallout of debt default.
Fed's Lockhart: No
Jobs Report, Fed "more cautious" – Calculated
Risk
Fed’s Lacker: Unknown Whether Shutdown Would Delay Decision on Bond
Buying – WSJ
Fed’s Kocherlakota:
Must Do ‘Whatever It Takes’ to Aid Job Market – WSJ
Fed doves strike back
– Reuters
SHUTDOWN / DEBT CEILING
The shutdown of the U.S. government appeared likely to drag on for
another week and possibly longer as lawmakers consumed day three of the
shutdown with a stalling game and there was no end in sight until the next
crisis hits Washington around October 17.
Anatole Kaletsky: Financial
markets and businesses have responded with a tolerance bordering on complacency
to the shenanigans in Washington, but this attitude could change abruptly if the House Republicans’
capitulation is delayed too long.
Will Shutdown Screw Up Next Month’s Jobs Report
Too? – WSJ
A prolonged government
closure could cause more damage to other data -- more than simply delaying
reports.
Markets (still) aren't too worried about the
debt ceiling. Markets are sometimes wrong. – WaPo
Debt Ceiling Drama
Scenarios: BGOV Executive Outlook – BB
Immediate ‘Clean’ Extension * Extension With Some Conditions * Administration
Invokes 14th Amendment * Administration Prioritizes Payments * Temporary
Default Followed by Compromise *
Kick the Can *
Kick the Can *
Why Republicans Shut
Down the Government – BB
They feel the culture is running away from them (and they're mostly
right). They lack the power to control their own government. But they still
have just enough to shut it down.
You probably think the shutdown’s about
spending. It isn’t. – WaPo
Goldman's 3 Debt-Ceiling Debacle Scenarios – ZH
What Does The Market Know That Boehner Doesn't? – ZH
The federal
government: Closed until further notice – The
Economist
Shutdown Shuts Down Commitment of Traders
Reports From CFTC – WSJ
How a game theorist
would solve the shutdown showdown – WaPo
The fight over raising the U.S. debt ceiling is
starting to rattle the money markets and could eventually disrupt the flow of
cash needed for banks to lend and companies to invest.
How to Make a Non-Disastrous Debt-Limit Deal – View
/ BB
Dancing on the Edge of Default – NYT
Wall Street Seeks to Soothe, While Preparing
for Trouble – NYT
Shut Down Round Up:
The Latest In Dysfunctional Government News – ZH
What If We Go Past
The "X" Date? – ZH
BofAML: Most options are unviable – the most fair and sensible option
would be to implement a delayed payment regime where no payments would be made
until they could all be made on a day-by-day basis.
Economic Confidence
Plummets – NYT
The shutdown and the
economy – Sober
Look
No end in sight even as another, more serious conflict over raising the
nation's borrowing authority started heating up.
ASIA
BOJ Beat: Abe Adviser Wants Stronger Commitment
Fom Kuroda – WSJ
Shanghai Free Trade
Zone: The next Shenzhen? – The
Economist