Fed minutes contained no surprises - except that the FOMC really, really wants to taper - but is too scared of the feedback. More on Yellen, and some good ones on Europe. Of course, the U.S. shutdown continues, but no proper news yet.
It only takes a minute, girl!
Previously on
MoreLiver’s:
Roundups &
Commentary
Markets – Between
The Hedges
Recap – Global
Macro Trading
Daily Risk Monitor – Global Macro Monitor
The Closer – alphaville / FT
US: Dow Dead-Cat Bounces Off 200DMA; Nasdaq Ends Below 50DMA – ZH
EUROPE
Winding Down EU Banks: The Job No-One Wants – WSJ
The top job in Europe’s new bank resolution regime has become
something of a poisoned chalice. Lawyers for European Union states this week
urged the European Commission to take on even more powers over winding down
troubled banks. But the commission immediately said it didn’t want them.
European Union: ‘Super-administration for Europe’ – Presseurop
The EU’s 28 member
states are examining options for the liquidation of ailing banks within the
framework of the banking union, reports Handelsblatt.
The Myth of German Euroskepticism – Project
Syndicate
Daniel Gros: According
to conventional wisdom, the eurozone crisis has reduced citizens’ trust in the
EU and in European institutions in general across all member states, with
several recent reports claiming that the German public, in particular, has
turned its back on Europe. But the conventional wisdom is simply wrong.
Danish current account surplus breaking every
record – Nordea
Spain found close to EUR 11bn of interest for its new 30-year benchmark, a
strong signal of how receptive the European bond market is and a testament of
all the progress Spain has already made
The economic consequences of low interest rates – ECB
Public lecture by
Benoît Cœuré, Member of the Executive Board of the ECB, at the International
Center for Monetary and Banking Studies, Geneva, 9 October 2013
UNITED STATES
The counter-trend
rally in U.S. Treasurys that we had anticipated has largely played out and it
is time to position for an eventual resumption of the cyclical bear market. We
recommend moving bond portfolio duration to a fully below benchmark stance.
S&P 500 Is NOT Oversold – Short
Side of the Long
SHUTDOWN
/ DEBT CEILING
Deutsche Bank: Debt Ceiling "Will Get
Resolved With A Big Sell-Off" – ZH
Deadlock Worry Jolts the Market for T-Bills – NYT
Reflections on the current sad state of US
politics – Nordea
The GOP rewrites its ransom note – WaPo
Congress needs adult
supervision. Since the President can’t provide it and the Republican leadership
won’t, the market might well have to step in and do the job. Such a resolution
wouldn’t be pretty, but history suggests it would be reasonably effective
Understanding the Game Being Played in
Washington – HBR
Comment: Politics, Policy,
Deadbeats and Default – Calculated
Risk
The shutdown, currency sovereignty and
sovereign default – Credit
Writedowns
What’s So Special About November 1? – Macro
and Markets
Government Shutdown: Don’t Believe the Hype – Reason
Complacency on Wall Street Could Be Worse Than
a Panic – NYT
Collateral crunch feared as T-bill yields leap – FT
Are T-bills cash, or aren’t they? – alphaville
/ FT
FEDERAL
RESERVE
Fed’s Evans: Budget Showdown Gives Him ‘Great
Pause’ – WSJ
IMF says Fed taper
risks $2.3tn hit to bonds – FT
Fund issues warning in global financial situation assessment
Re-Decentralizing the Fed – Project
Syndicate
Financial circles are
buzzing about Janet Yellen’s nomination to take over as Chair of the US Federal
Reserve. But they are largely ignoring another, more fundamental question: How
much discretion should the Fed be given to conduct daring monetary-policy
experiments like the vast quantitative easing of the last five years?
FOMC
MINUTES
FOMC Minutes September 17-18 meeting – FED
FOMC Minutes Reveal "Most Fed Officials
Saw QE Tapering In 2013" –
ZH
Taper? Forget About It Now – Bespoke
FOMC Minutes: "Considerable risks
surrounding fiscal policy" –
Calculated
Risk
There was a
significant debate on asset purchases at the last FOMC meeting. Those who didn't want to reduce asset
purchases expressed several reasons including "Considerable risks
surrounding fiscal policy" (no kidding!). Even those who wanted to reduce asset
purchases "indicated that they favored a relatively small reduction to
signal the Committee's intention to proceed cautiously".
Key Passages From Fed Minutes Show Officials
Torn on Tapering – WSJ
Despite their angst,
many officials still want to start winding down the program this year and end
it next year.
Fed Admits It Is Caught In A Catch 22 – ZH
Suggest tapering due
to an improving economy and watch "financial conditions" tighten
(i.e., stock tumble, rates soar), crashing the "economy"... or do
nothing.
Most Fed Officials Saw QE Tapering This Year,
Minutes Show – BB
Fed decision not to taper was 'close call' for
several –minutes – Reuters
No Wild Reaction After These Fed Minutes – WSJ
Shorter FOMC minutes: this economy management
stuff is hard – alphaville
/ FT
Public revelations of
internal Fed divisions were always a risk of Bernanke’s more democratic
approach to overseeing the Fed. But they also can undermine policy, especially
when forward guidance is such an integral part of said policy. And perhaps the
main lesson we take from the minutes is that Janet Yellen’s hands are going to
be very, very full next year.
YELLEN
Janet Yellen’s Long
History as a Regulator – WSJ
A Look at Yellen’s
Research: Unemployment, Advertising and Out-of-Wedlock Births – WSJ
Nine amazing facts
about Janet Yellen, our next Fed chair – WaPo
Janet Yellen’s
Historic Nomination For Federal Reserve Chairwoman – The
Daily Beast
Wall Street Reacts to
Janet Yellen: ‘She Has Her Work Cut Out for Her’ – WSJ
White House Talking
Points on Yellen – WSJ
Janet Yellen in her
own words: An exclusive interview – WaPo
*Economists Don’t See
Much Difference Between Yellen Fed and Third Bernanke Term – WSJ
Is Yellen a Hawk in
Dove's Feathers? – View
/ BB
A new hand on the
tiller – Free
exchange / The Economist
Janet Yellen’s Short
and Storied Newspaper Career – WSJ
ASIA
Chinese Think Tank Puts Shadow Banking at 40%
of GDP – WSJ
Is it 1997 redux? Not
in East Asia, according to the World Bank’s East Asia And
Pacific Economic Update: most economies here “are in a relatively strong
position to face this shock, with significantly lower vulnerabilities than in
the run-up to the 1997–98 Asian crises”.
Compassionate Meritocracy – Project
Syndicate
While Singapore's leaders have long advocated political
meritocracy at home, their political model can and should influence other
countries, especially those with a Confucian heritage. In this sense, Singapore’s strong relationship with China could be a game changer for political
meritocracy – and thus for democracy.
OTHER
The most important charts in the world – BI
From the Wall Street's
brightest minds.
Still Some Hurdles On The Fiscal Path – iMFdirect
We created an index of ‘fiscal difficulty’ that shows
the biggest challenge ahead for advanced economies is to maintain budget
surpluses until debt ratios return to lower levels. We expect this will take several years.
FINNISH
Valtio
ei ole kotitalous – TalSa
Kotitaloudet eivät voi elää yli varojensa,
miksi valtiot voisivat? Kyse on talouden eri sektoreista, joiden sekoittaminen
toisiinsa johtaa haitallisiin seurauksiin. Hallituksen finanssipolitiikka
tuhoaa yksityisen sektorin nettovarallisuutta.
"Suomella
paljon veroparatiisin piirteitä" – TalSa
Suomella on paljon veroparatiisia muistuttavia
piirteitä, verotusneuvos Markku Hirvonen sanoo. Hän uskoo kuitenkin, että
kansainvälinen tietojenvaihto tehostuu.
Suomesta
veroparatiiseihin 320 miljoonaa vuodessa – TalSa
Suomesta siirtyy veroparatiiseihin 320
miljoonaa euroa vuodessa. Finnwatchin mukaan tietojen saaminen yritysten
toiminnasta on hyvin vaikeaa. Kansalaisjärjestöt tukevat ehdotusta
maakohtaisesta kirjanpidosta, koska pelko tietojen julkisuudesta jarruttaisi
veropakoilua.
Puolet
maailmankaupasta kulkee veroparatiisien kautta – Kansan
Uutiset
Kotitalouksien
velkaantumisaste ennallaan Q2 2013 – Tilastokeskus
Kokoomuskokemus – Saloniemi